Exercise 10-18 Account Titles and Explanation Debit Credit Account Titles and Ex
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Question
Exercise 10-18
Account Titles and Explanation
Debit
Credit
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
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Account Titles and Explanation
Debit
Credit
Account Titles and Explanation
Debit
Credit
Exercise 10-18
Oriole Limited exchanged equipment that it uses in its manufacturing operations for similar equipment that is used in the operations of Sheffield Limited. Oriole also paid Sheffield $3,200 in cash. The following information pertains to the exchange.Oriole Sheffield Equipment (cost) $51,000 $54,500 Accumulated depreciation 30,000 21,000 Fair value of equipment 24,000 27,200
Explanation / Answer
Have commercial substance
Date
Particulars
Debit
Credit
Oriole Limited
Equipment (Cash paid+Fair value)
(3,200+24,000)
$27,200
Accumulated depreciation
$30,000
Equipment of Oriole
$51,000
Cash
$3,200
Gain on exchange (Bal fig)
$3,000
Sheffield Limited
Equipment new of oriole fair value
$24,000
Accumulated depreciation
$21,000
cash
$3,200
Loss on exchange (Bal fig)
$6,300
Equipment cost old
$54,500
Not to have commercial substance
Oriole Limited
Equipment (cost-Acc dep)+ cash
(21,000+3200)
$24,200
Accumulated depreciation
$30,000
Equipment cost
$51,000
cash
$3,200
Sheffield Limited
No Change , same as above
Equipment new
$24,000
Accumulated depreciation
$21,000
cash
$3,200
Loss on exchange (Bal fig)
$6,300
Equipment cost old
$54,500
Have commercial substance
Date
Particulars
Debit
Credit
Oriole Limited
Equipment (Cash paid+Fair value)
(3,200+24,000)
$27,200
Accumulated depreciation
$30,000
Equipment of Oriole
$51,000
Cash
$3,200
Gain on exchange (Bal fig)
$3,000
Sheffield Limited
Equipment new of oriole fair value
$24,000
Accumulated depreciation
$21,000
cash
$3,200
Loss on exchange (Bal fig)
$6,300
Equipment cost old
$54,500
Not to have commercial substance
Oriole Limited
Equipment (cost-Acc dep)+ cash
(21,000+3200)
$24,200
Accumulated depreciation
$30,000
Equipment cost
$51,000
cash
$3,200
Sheffield Limited
No Change , same as above
Equipment new
$24,000
Accumulated depreciation
$21,000
cash
$3,200
Loss on exchange (Bal fig)
$6,300
Equipment cost old
$54,500
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