Question

d View Policies Show Attempt History Current Attempt in Progress Indigo Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used in the operations of Sweet Company. The following information pertains to the exchange. Sweet Co. Indigo Co. $30,240 $30,240 Equipment (cost) Accumulated depreciation 20,520 10,800 Fair value of equipment 13,500 16,740 Cash given up 3,240

Answer 1

Account titles and explanation	Debit	Credit
Indigo Company
Equipment (new) (3,240 cash+fair value of old 13,500)	16,740
Accumulated depreciation	20,520
Cash		3,240
Equipment (old)		30,240
Gain on disposal of equipment		3,780
Sweet Company
Equipment (new)	13,500
Accumulated depreciation	10,800
Cash	3,240
Loss on disposal of equipment	2,700
Equipment (old)		30,240