Question
Asked Nov 29, 2019
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Robertson Company exchanged a machine for some land. The machine had cost $17,000, was 70% depreciated, and could be sold for $4,500. Robertson paid $950 in addition to giving up the machine.

compute the amount at which the land should be recorded.

 

 

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Expert Answer

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Step 1

Depreciation expense:

 

Depreciation is a method of reducing the capitalized cost of long-lived operating assets or plant assets for the period the asset is used.

Step 2

Compute the amount at which the land sh...

Cost of the machine
Less: Depreciation (S17,000x70%)
Carrying value at date of sale
Proceeds from sale
Loss on sale
$17,000
11,900
$5,100
4,500
(600)
Add: Additional amount paid by Company R
Land value
950
$350
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Cost of the machine Less: Depreciation (S17,000x70%) Carrying value at date of sale Proceeds from sale Loss on sale $17,000 11,900 $5,100 4,500 (600) Add: Additional amount paid by Company R Land value 950 $350

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