Sweet Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first dayof work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, whohad never before seen such a machine, managed to break the machine. Sweet Corporation gave the machine plus $503 to PharoahBusiness Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines.Sweet Corp.Pharoah Co.(OldMachine)(NewMachine)Machine cost$429$400Accumulated depreciation207-0-Fair value126629For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "NoEntry" for the account titles and enter 0 for the amounts.) Account Titles and ExplanationDebitCreditSweet CorporationPharoah Business Machine Company

Solutions:- Preparation of journal entry to record the exchange as follows under:- In the books of…

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.)

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.)

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 71IIP

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