ACT5741
J & J is considering replacing some of their older computers. Give the potential entries given the following scenarios. Assume all scenarios are independent and have no commercial substance.
a. Fourteen new computers - $140,000, additional $2,000 for freight and 6% tax on $140,000. Estimated useful life is 5 years with 5% salvage value. They are treated as a single unit for financial reporting purposes. No trade-ins.
b. Ten existing computers will be traded in (total trade-in value $10,000) for the new computers. The computers are treated as a single unit with an original cost of $80,000 and book value of $8,000. The remainder was paid in cash. They are treated as a single unit for financial reporting purposes
c. Ten existing computers will be traded in (total trade-in value $20,000) for the new computers. The computers are treated as a single unit with an original cost of $80,000 and book value of $20,000. The remainder was paid in cash. They are treated as a single unit for financial reporting purposes
Required:
1) Prepare the potential journal entries for the above events with no commercial substance
2)Repeat each of the above requirements assuming commercial substance.
Answers
Status NEW
Posted 11 Jul 2017 09:07 AM
My Price 5.00
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file 1499765416-Solutions file.docx preview (51 words )
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