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Problem 23-7 and 23-8

Smile Company exchanged old equipment with a carrying amount of $2,400,000 for new equipment worth $500,000, resulting in a $100,000 gain on the exchange. Lecherous Company traded in old equipment with a carrying amount of $400,000 that had a trade-in value of $420,000 when purchasing new equipment for $1,400,000, resulting in a $20,000 gain. Frown Company exchanged old equipment with a carrying amount of $2,200,000 for new equipment worth $500,000, resulting in a $50,000 gain.

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Maria Licuanan
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406 views2 pages

Problem 23-7 and 23-8

Smile Company exchanged old equipment with a carrying amount of $2,400,000 for new equipment worth $500,000, resulting in a $100,000 gain on the exchange. Lecherous Company traded in old equipment with a carrying amount of $400,000 that had a trade-in value of $420,000 when purchasing new equipment for $1,400,000, resulting in a $20,000 gain. Frown Company exchanged old equipment with a carrying amount of $2,200,000 for new equipment worth $500,000, resulting in a $50,000 gain.

Uploaded by

Maria Licuanan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Problem 23-7

SMILE COMPANY FROW


Equipment - new 500,000.00 Equipment - new
Accumulated depreciation - old 2,000,000.00 Accumulated depreciation - old
Equipment - old 2,400,000.00
Gain on exchange 100,000.00

Problem 23-8 Lecherous Company

Cash price without traded in 1,400,000.00


Less: Cash payment with traded in 980,000.00
Trade in value 420,000.00
Less: Carrying amount 400,000.00
Gain on exchange 20,000.00

Equipment - new 1,400,000.00


Accumulated depreciation - old 600,000.00
Equipment - old 1,000,000.00
Cash 980,000.00
Gain on exchange 20,000.00
m 23-7
FROWN COMPANY
Equipment - new 500,000.00
Accumulated depreciation - old 1,750,000.00
Equipment - old 2,200,000.00
Gain on exchange 50,000.00

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