Flounder Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Flounder Corporation gave the machine plus $442 to Culver Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.  Flounder Corp.(Old Machine) Culver Co.(New Machine)Machine cost $377  $351 Accumulated depreciation 182  –0– Fair value 111  553 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Account Titles and ExplanationDebitCreditFlounder Corporation                 Culver Business Machine Company                   Click if you would like to Show Work for this question:Open Show Work   SHOW LIST OF ACCOUNTSLINK TO TEXT

Question
Asked Nov 12, 2019
10 views
Flounder Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Flounder Corporation gave the machine plus $442 to Culver Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.

   
Flounder Corp.
(Old Machine)
 
Culver Co.
(New Machine)
Machine cost   $377     $351  
Accumulated depreciation   182     –0–  
Fair value   111     553  

For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation
Debit
Credit
Flounder Corporation
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Culver Business Machine Company
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

Click if you would like to Show Work for this question:
Open Show Work

 

 

 

SHOW LIST OF ACCOUNTS
LINK TO TEXT
check_circle

Expert Answer

star
star
star
star
star
1 Rating
Step 1

Record journal entry for exchange of old machine for new machine that has c...

Post
Date Accounts title and explanation Ref.
Debit
Credit
New Machine
Accumulated depreciation
Loss on disposal of machine
Old Machine
$553
$182
$84
$377
$442
Cash
(To record exchange of old
machine for a new machine)
help_outline

Image Transcriptionclose

Post Date Accounts title and explanation Ref. Debit Credit New Machine Accumulated depreciation Loss on disposal of machine Old Machine $553 $182 $84 $377 $442 Cash (To record exchange of old machine for a new machine)

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Peete Company identifies the following items for possible inclusion in the physical inventory.Indica...

A: A physical check of stock is a real tally of the considerable number of items that a business stock....

question_answer

Q: Matchlessly, Inc., was organized in 2017. At December 31, 2017, the company’sBalance sheet reported ...

A: Stockholders’ Equity:Stockholders’ Equity is the total amount of capital given to a company by its s...

question_answer

Q: At Bargain Electronics, it costs $28 per unit ($15 variable and $13 fixed) to make an MP3 player tha...

A: Step 1: Workings:

question_answer

Q: Durafabric was a very successful company.  Banner was a new customer of Durafabric, who wants to app...

A: As per authoring guidelines. I am answering first three sub-parts of the question. Please repost the...

question_answer

Q: Exercise 9-08 On July 1, 2019, Ivanhoe Company purchased new equipment for $90,000. Its estimated u...

A: Compute depreciation.

question_answer

Q: homework question 11

A: Treasury stock: The shares which were reacquired or bought back by the company, but not formally ret...

question_answer

Q: M8-12 Computing Depreciation Under Straight-Line and Double-Declining-Balance A delivery van costing...

A: Click to see the answer

question_answer

Q: Oriole Company purchased a delivery truck for $28,000 on January 1, 2020. The truck has an expected ...

A: Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, (2) the units-of-...

question_answer

Q: What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entrie...

A: Accounts Receivable: An accounts receivable is the money owed by the customers to the business for t...