FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000 less
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Marshall Const.
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Brigham Mfg. Co.
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| Fair value of old crane |
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$ 82,00000
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00
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00
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| Fair value of new crane |
00
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00
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00
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$200,00000
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| Cash paid |
00
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118,00000
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00
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00
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| Cash received |
00
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00
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00
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118,00000
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Instructions
a. Assuming that this exchange is considered to have commercial substance, prepare the
b. Assuming that this exchange lacks commercial substance for Marshall, prepare the journal entries on the books of Marshall Construction.
c. Assuming the same facts as those in (a), except that the fair value of the old crane is $98,000 and the cash paid is $102,000, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing.
d. Assuming the same facts as those in (b), except that the fair value of the old crane is $97,000 and the cash paid $103,000, prepare the journal entries on the books of (1) Marshall Construction and (2) Brigham Manufacturing.
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