Case A Jones Corporation Purchased Some Land Buildings And Machinery For A Total Cash Price Of 50 000 At The Date 1 (53.7 KiB) Viewed 20 times
Case A Jones Corporation Purchased Some Land Buildings And Machinery For A Total Cash Price Of 50 000 At The Date 2 (36.35 KiB) Viewed 20 times
Case A: Jones Corporation purchased some land, buildings, and machinery, for a total cash price of $50,000. At the date of the purchase these items were being carried on the books of the seller as follows: land, $15,000; building, $40,000, and machinery, $20,000. Just prior to the purchase, Jones Corporation had employed a valuation specialist to appraise the assets. The appraisal determined the following values land, $17,000; building, $16,000, and machinery, $33,000. Case B: Marshall Company exchanges a machine that cost $4,000 and has accumulated depreciation of $2,560 for a similar machine. Marshall also receives $25 in the exchange. The fair market value of the old asset is $750. The fair market value of the new asset is $725. There is no commercial substance to the transaction.
Required For each case, provide the journal entry for the transaction (i.e., purchase or exchange). Clearly identify the individual assets acquired or exchanged in the journal entry titles (e.g., PPE- machine, PPE- building, PPE- new asset, etc.)
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