Using the chart of accounts in Figure 2-1, determine the changes to the balance sheet, income statement, job cost ledger, and equipment ledger as the result of purchasing a new loader (Loader 3) to replace an existing loader (Loader 2). The new loader costs $115,200. The new loader will be paid for by trading in the existing loader for a credit of $15,200 and the remaining $100,000 will be financed through the dealership. The existing loader was purchased for $95,000 and $83,230 of depreciation had been taken.
Answer :
Balance sheet | |||
Assets | Amount | Liabilities | Amount |
Loader 3 | 115200 | Loader 2 (90000 - 83230) | 11770 |
Long term liability | 100000 | ||
Equity | |||
Net income | 3430 | ||
115200 | 115200 |
Calculation of gain exchange of loader | |
Cost of loader 2 | 95000 |
Less : Depreciation | 83230 |
Book value of the asset | 11770 |
Value of exchange | 15200 |
Gain on exchange | 3430 |
Income statement | |
Gain on sale of asset | 3430 |
Net income increase | 3430 |
Equipment Loader) | |||
Loader 2 | 95000 | Accumulated depreciation | 83230 |
Balance | 11770 | ||
95000 | 95000 | ||
Book value of the loader | 11770 | Exchanged for | 15200 |
Gain on exchange | 3430 | Book value of loader 3 | 100000 |
Purchase of new equipment | 100000 | ||
115200 | 115200 |
Using the chart of accounts in Figure 2-1, determine the changes to the balance sheet, income...
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