Question

--/1 Question 1 View Policies Current Attempt in Progress Culver Company purchased equipment on January 2, 2016, for $113,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $11,600. Culver uses straight-line depreciation on all assets. On January 2, 2020, Culver exchanged this equipment plus $12,500 in cash for newer equipment. The old equipment has a fair value of $47,600. Prepare the journal entry to record the exchange on the books of Culver Company. Assume that the exchange has commercial substance. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 2

Answer 1

Answer Tranaction ha Ang commertial substana a.Fro fift 1doss) on ) Fo?r Yalue of Asset uted te Book value of vred Asset Profit on dspo tal of Asset 47,600 31.660 15,ta0 diporal of Ured Aaset b Boot valu of vred Asoet Cost of vred Asset Less; oepreciaten C13,000-11,bo0)x ycar 13,000 5 31,880 Book value Journal enty Neno tquipment 4IC DeprecaHonaic TD profft on Dlepotal TD old equipmint 4/c TO carh 1C bo,I00 DY 15720 IL3 DOO 3880 1a,500 theng tae of old. equipmant 1Dr Newo D