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ASHA 777 [7]
3 years ago
11

Cedric Company recently traded in an older model computer for a new model. The old model's book value was $140,000 (original cos

t of $370,000 less $230,000 in accumulated depreciation) and its fair value was $210,000. Cedric paid $65,000 to complete the exchange, which has commercial substance.
Calculate the following values:
1. Amount to debit for new equipment
2. Amount to debit accumulated depreciation
3. Amount to credit to cash
4. Amount to credit for old equipment
5. Gain or loss on sale
Business
1 answer:
Semmy [17]3 years ago
8 0

Answer:

1. $210,000

2.$230,000

3. $65,000

4. $370,000

5. $135,000 loss

Explanation:

1. Amount to debit for new equipment

Use the Fair Value of Asset given

2. Amount to debit accumulated depreciation

Use the accumulated depreciation of asset given up.

3. Amount to credit to cash

Use the Cash Paid up

4. Amount to credit for old equipment

Use the cost of asset given up

5. Gain or loss on sale

Gain or loss = Carrying Amount - Fair Value - Cash traded up

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meriva

Answer:

Sales Revenue                                                       $39,300,000

Cost of Goods Sold                                               ($20385000)  

Gross Profit                                                            $18915000

Selling, General and Administrative Expenses   ($7,225,000)  

Net Income                                                             $11690000

Explanation:

Sales Revenue                                                       $39,300,000

Cost of Goods Sold                                               ($20385000)  

Gross Profit                                                            $18915000

Selling, General and Administrative Expenses   ($7,225,000)  

Net Income                                                             $11690000  

Cost of Goods Sold is calculated as (Opening Inventory + Purchases – Closing Inventory) ($3,100,000 + $21,400,000 - $4,115,000).

Sales Revenue is deducted from Cost of Goods Sold to find Gross Profit after which Selling, General and Administrative Expenses are deducted which gives us Net Income of $11690000.

4 0
3 years ago
Cushman company, inc. had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods
natka813 [3]
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3 years ago
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Answer:

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Explanation:

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Therefore, Making profit will be more by $71,000 and for computing the Loss in Income if part is bought we simply applied the above formula.

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The correct answer:
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Source, explanation and more answers: https://goo.gl/LkZN6c
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