Cedric Company recently traded in an older model of equipment for a new model. The old...

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Cedric Company recently traded in an older model of equipment for a new model. The old models book value was $270,000 (origi

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Answer 1

Answer #1

Old book value of Equipment = $270,000

Amount paid to buy new equipment = $70,000

Cost of New Equipment = Fair value of old equipment +cash paid= $300,000 + $70,000 = $370,000.

Gain on Exchange = $300,000 - $270,000 = $30,000

Date	Account Details & Explanation	Debit	Credit
1	Equipment-new	$370,000
	Accumulated Depreciation	$320,000
	Equipment-old		$590,000
	Gain		$30,000
	Cash		$70,000

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Answer 2

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