Moore Corporation follows a policy of a 10% depreciation charge per year on all

Question

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings. The following transactions occurred in 2015: March 31, 2015- Negotiations which began in 2014 were completed and a building purchased 1/1/06 (depreciation has been properly charged through December 31, 2014) at a cost of $6,632,000 with a fair value of $4,160,000 was exchanged for a second building which also had a fair value of $4,160,000. The exchange had no commercial substance. Both parcels of land on which the buildings were located were equal in value, and had a fair value equal to book value. June 30, 2015- Machinery with a cost of $706,000 and accumulated depreciation through January 1 of $529,500 was exchanged with $446,000 cash for a parcel of land with a fair value of $679,000. The exchange had commercial substance. Prepare all appropriate journal entries for Moore Corporation for the above dates

Explanation / Answer

Journal Entries : Building

Journal Entries : Machinery and Land

Date Accounts Title and Explanation Debit Credit March 31 2015 Depreciation Expense (6632000*5%*3/12) 82900 Accumulated Depreciation-Building 82900

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