Sheridan Corporation wishes to exchange a machine used in its operations. Sheridan has received the following offers from other companies in the industry. 1. Skysong Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both parties.) 2. Concord Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Marigold Company offered to exchange a similar machine, but wanted $3,420 in addition to Sheridan's machine. (The exchange has commercial substance for both parties.) In addition, Sheridan contacted Swifty Corporation, a dealer in machines. To obtain a new machine, Sheridan must pay $106,020 in addition to trading in its old machine. Sheridan Skysong Concord Marigold Swifty Machine cost $182,400 $136,800 $173,280 $182,400 $148,200 Accumulated depreciation 68,400 51,300 80,940 85,500 -0- Fair value 104,880 78,660 104,880 108,300 210,900 For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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 O for the amounts.)
Sheridan Corporation wishes to exchange a machine used in its operations. Sheridan has received the following offers from other companies in the industry. 1. Skysong Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both parties.) 2. Concord Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Marigold Company offered to exchange a similar machine, but wanted $3,420 in addition to Sheridan's machine. (The exchange has commercial substance for both parties.) In addition, Sheridan contacted Swifty Corporation, a dealer in machines. To obtain a new machine, Sheridan must pay $106,020 in addition to trading in its old machine. Sheridan Skysong Concord Marigold Swifty Machine cost $182,400 $136,800 $173,280 $182,400 $148,200 Accumulated depreciation 68,400 51,300 80,940 85,500 -0- Fair value 104,880 78,660 104,880 108,300 210,900 For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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 O for the amounts.)
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter5: Business Deductions
Section: Chapter Questions
Problem 18P
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Transcribed Image Text:Sheridan Corporation wishes to exchange a machine used in its operations. Sheridan has received the following offers from other
companies in the industry.
1.
Skysong Company offered to exchange a similar machine plus $26,220. (The exchange has commercial substance for both
parties.)
2.
Concord Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3.
Marigold Company offered to exchange a similar machine, but wanted $3,420 in addition to Sheridan's machine. (The
exchange has commercial substance for both parties.)
In addition, Sheridan contacted Swifty Corporation, a dealer in machines. To obtain a new machine, Sheridan must pay $106,020 in
addition to trading in its old machine.
Sheridan
Skysong
Concord
Marigold
Swifty
Machine cost
$182,400
$136,800
$173,280
$182,400
$148,200
Accumulated depreciation
68,400
51,300
80,940
85,500
-0-
Fair value
104,880
78,660
104,880
108,300
210,900
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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.)
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