HW_9 - Problem 10-8 Case A. Requirement 1 Book value less...

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Case A. Requirement 1 Book value less fair value = loss on exchange $12,000 - 9,000 = $3,000 loss Fair value of old tractor + cash given = Initial value of new tractor $9,000 + 20,000 = $29,000 Journal entry (not required): New tractor ($9,000 + 20,000) .......................................... 29,000 Accumulated depreciation - old asset (account balance) ... 16,000 Loss ($12,000 – 9,000) ................................................................ 3,000 Cash ......................................................................... 20,000 Old tractor (account balance) ........................................ 28,000 Requirement 2 Fair value less book value = gain on exchange $14,000 - 12,000 = $2,000 gain Fair value of old tractor + cash given = Initial value of new tractor $14,000 + 20,000 = $34,000 Journal entry (not required): New tractor ($14,000 + 20,000) ........................................ 34,000 Accumulated depreciation - old asset (account balance) ... 16,000 Cash ......................................................................... 20,000 Old tractor
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This note was uploaded on 02/10/2011 for the course UGBA 120a taught by Professor Cerf during the Spring '08 term at University of California, Berkeley.

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HW_9 - Problem 10-8 Case A. Requirement 1 Book value less...

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