a
Ex. 301
Dodd Delivery Company and Hess Delivery Company exchanged delivery trucks on January 1, 2014. Dodd's truck cost $84,000, had accumulated depreciation of $69,000, and has a fair value of $11,000. Hess's truck cost $65,000, had accumulated depreciation of $54,000, and has a fair value of $11,000.
Instructions
(a)Journalize the exchange for Dodd Delivery Company.
(b)Journalize the exchange for Hess Delivery Company.
a
Ex. 302
Prepare the journal entries to record the following transactions for Eklund Company which has a calendar year end and uses the straight-line method of depreciation.
a)On September 30, 2014, the company exchanged old delivery equipment and $24,000 for new delivery equipment. The old delivery equipment was purchased on January 1, 2012, for $84,000 and was estimated to have a $12,000 residual value at the end of its 5-year life. Depreciation on the delivery equipment has been recorded through December 31, 2013. It is estimated that the fair value of the old delivery equipment is $39,000 on September 30, 2014.
(b)On June 30, 2014, the company exchanged old office equipment and $40,000 for new office equipment. The old office equipment originally cost $80,000 and had accumulated depreciation to the date of disposal of $35,000. It is estimated that the fair value of the old office equipment on June 30 was $50,000. The transaction has commercial substance.