Question

Question 13 Wildhorse Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Wildhorse Corporation gave the machine plus $ 374 to Sheffield Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines. Wildhorse Sheffield Co. Corp. (New Old Machine) Machine) $297 Machine cost Accumulated depreciation Fair value 319 154 94 468 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Sheffield B usiness Machine Com pany

Answer 1

Wildhorse Corporation
Particular	Debit	Credit
Machine	$468
Accumulated Depreciation	$154
Loss on Disposal of Machinery	$71
Machinery		$319
Cash		$374
Sheffield Business Machine Company
Cash	$374
Inventory	$94
Cost of good sold	$297
Sales		$468
Inventory		$297