Chapter+10+Quiz+-+Nonmonetary+Asset+Exchange+w+answer -...

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Chapter 10 Quiz – Nonmonetary Asset Exchange NAME: ________________________________ Class: __________________________ On April 25, 2011, the Red Rock Canyon Company traded its laser equipment for the newer air-cooled ion lasers manufactured by American Laser Corporation. The old equipment had a book value of $100,000 (original cost of $500,000 less accumulated depreciation of $400,000) and a fair value of $75,000. Red Rock Canyon paid American Laser Corporation $430,000 in cash. Make the journal entry to record this transaction on the books of Red Rock Canyon Company. The
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Unformatted text preview: transaction has commercial substance. 4/25/2011 Laser Equipment – new 505,000 Accumulated Depreciation 400,000 Loss on Disposal of Equipment 25,000 Laser Equipment – old 500,000 Cash 430,000 The $25,000 difference between the equipment’s fair value of $75,000 and its book value of $100,000 is recognized as a loss. The new equipment is valued at $505,000, the fair value of the old equipment of $75,000 plus the $430,000 cash given....
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This note was uploaded on 03/02/2012 for the course AICS 3115 taught by Professor Lynnalmond during the Spring '11 term at Virginia Tech.

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