Old fixtures: Cost, $91,000 Accumulated depreciation, $68,000 New fixtures: Cash paid, $110,000 Market value, $133,000
Old fixtures: Cost, $91,000 Accumulated depreciation, $68,000 New fixtures: Cash paid, $110,000 Market value, $133,000
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 8DQ: Fully depreciated equipment costing 50,000 was discarded. What was the effect of the transaction on...
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Question
Exchanging assets—two situations
Partner Bank recently traded in office fixtures. Here are the facts:
Requirements
- Record Partner Bank’s trade-in of old fixtures for new ones. Assume the exchange had commercial substance.
- Now let’s change one fact. Partner Bank feels compelled to do business with Elm Furniture, a bank customer, even though the bank can get the fixtures elsewhere at a better price. Partner Bank is aware that the new fixtures’ market value is only $126,000. Record the trade-in. Assume the exchange had commercial substance.
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