Lupa inc. trades its used machine cost 12000 less 4000, Ask an Expert

Accounting

Presented below are two independent transactions. Both transactions have commercial substance.

Sidney Co. exchanged old trucks (cost $64,000 less $22,000 accumulated depreciation) plus cash of $17,000 for new trucks. The old trucks had a fair market value of $36,000.

Lupa Inc. trades its used machine (cost $12,000 less $4,000 accumulated depreciation) for a new machine. In addition to exchanging the old machine (which had a fair market value of $9,000), Lupa also paid cash of $3,000.

a-Prepare the entry to record the exchange of assets by Sidney Co.

b-Prepare the entry to record the exchange of assets by Lupa Inc.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M975764

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