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13 April, 18:57

Grouper Company exchanged equipment used in its manufacturing operations plus $4,080 in cash for similar equipment used in the operations of Monty Company. The following information pertains to the exchange.

Grouper Co. Monty Co.

Equipment (cost) $38,080 $38,080

Accumulated depreciation 25,840 13,600

Fair value of equipment 17,000 21,080

Cash given up 4,080

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Cred

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  1. 13 April, 19:13
    0
    Answer and Explanation:

    Grouper Company

    Dr Accumulated depreciation 25,840

    Dr Equipment 16,680

    Cr Equipment 38,080

    Cr Cash 4,080

    Monty Company

    Dr Equipment 17000

    Dr Accumulated depreciation 13600

    Dr Cash 4080

    Dr loss on disposal of equipm 3400

    Cr Equipment 38,080

    b)

    Grouper Company

    Dr Accumulated depreciation 25,840

    Dr Equipment 21,080

    Cr Equipment 38,080

    Cr Gain on disposal of equipment 4760

    Cr Cash 4,080

    Monty Company

    Dr Equipment 17000

    Dr Accumulated depreciation 13600

    Dr Cash 4080

    Dr loss on disposal of equipm 3400

    Cr Equipment 38,080
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