Sheffield Company exchanged machinery with an appraised value of $3,489,000, a recorded cost of $5,312,000 and accumulated
depreciation of $2,656,000 with Wildhorse Corporation for machinery Wildhorse owns. The machinery has an appraised value of
$3,348,000, a recorded cost of $6,360,000, and accumulated depreciation of $3,498,000. Wildhorse also gave Sheffield $141,000 in
the exchange. Assume depreciation has already been updated.
(a)
Your answer is partially correct.
Prepare the entries on both companies' books assuming that the exchange had commercial substance. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles
and enter 0 for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Sheffield
Account Titles and Explanation
Machinery
Cash
Accumulated Depreciation-Machinery
Gain on Disposal of Machinery
Machinery
Wildhorse
Account Titles and Explanation
Machinery
Accumulated Depreciation-Machinery
Gain on Disposal of Machinery
Machinery
Cash
Debit
3348000
141000
2656000
Debit
3348000
3498000
Credit
833000
5312000
Credit
345000
6360000
141000