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P10-8 (Nonmonetary Exchanges) Susquehanna Corporation wishes to exchange a machine used in its operations

P10-8 (Nonmonetary Exchanges) Susquehanna Corporation wishes to exchange a machine used in its operations
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Solution Guide / Answer Key:

ACC/422 (ACC422)
INTERMEDIATE FINANCIAL ACCOUNTING II
University of Phoenix (UoP)

Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2007).
Intermediate accounting, (12th ed.) (13th Ed.)
Hoboken, NJ: John Wiley & Sons.

Week Three (Week 3)
Chapter 9 and Chapter 10
P10-8 (Nonmonetary Exchanges) Susquehanna Corporation wishes to exchange a machine used in its operations. Susquehanna has received the following offers from other companies in the industry.
1. Choctaw Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)
2. Powhatan Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)
3. Shawnee Company offered to exchange a similar machine, but wanted $8,000 in addition to Susquehanna’s machine. (The exchange has commercial substance for both parties.) In addition, Susquehanna contacted Seminole Corporation, a dealer in machines. To obtain a new machine, Susquehanna must pay $93,000 in addition to trading in its old machine.

Susquehanna Choctaw Powhatan Shawnee Seminole
Machine cost $160,000 $120,000 $147,000 $160,000 $130,000
Accumulated depreciation 50,000 45,000 71,000 75,000 –0–
Fair value 92,000 69,000 92,000 100,000 185,000

Instructions
For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (Round to nearest dollar.)

 

FILE: MS WORD

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