ACCTCy 3326 Glendening Quiz 5 Fall 2017 MAPLE Company and OAK, Inc. engage in a
ID: 2577850 • Letter: A
Question
ACCTCy 3326 Glendening Quiz 5 Fall 2017 MAPLE Company and OAK, Inc. engage in a nonmonetary exchange. MAPLE gives OAK a building with a fair value of $500,000 (the building's original cost and accumulated depreciation is $1,200,000 and $800,000, respectively). OAK gives MAPLE a building with an original cost of $700,000 and accumulated depreciation of $350,000. In addition to exchanging the buildings, MAPLE gives OAK $5,000 cash and a piece of equipment with a fair value of $15,000 (original cost to MAPLE is $20,000; accumulated depreciation is $10,000). 3. a. Prepare the journal entry to record the exchange for MAPLE. (2 points) b. Prepare the journal entry to record the exchange for OAK. (2 points) 4Explanation / Answer
a. In the books of MAPLE
• Accumulated Depreciation for Building Dr. $800000
To Building $800000
• Accumulated Depreciation for Equipment Dr. $10000
To Equipment $10000
• Building from OAK Dr. $350000
Loss on Exchange Dr. $65000 (balancing figure )
To Building $400000
To Equipment $10000
To Cash $5000
If you want to make a combined entry, the entry should be as follows :
Building from Oak Dr. $350000
Accumulated Depreciation for Building Dr. $800000
Accumulated Depreciation for Equipment Dr. $10000
Loss on Exchange Dr. $65000
To Building $1200000
To Cash $5000
To Equipment $20000
b. In the books of OAK
• Accumulated Depreciation for Building Dr. $350000
To Building $350000
• Building from Maple Dr. $500000
Cash Account Dr. $5000
Equipment Dr. $15000
To Building $350000
To Gain on Exchange $170000
If you want to make a combined entry, the entry should be as follows:
Building from Maple Dr. $500000
Cash Dr. $5000
Equipment Dr. $15000
Accumulated Depreciation for Building Dr. $350000
To Building $700000
To Gain on Exchange $170000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.