Calculatinnes Non Monetary Asset Exchange (10 points) Nabokoy Compary exchanges

Question

Calculatinnes Non Monetary Asset Exchange (10 points) Nabokoy Compary exchanges assets with Faulkner Company. Nabokov exchanges equipment with a historiol co of $45,000 and accumuliated depreciation to-date of $20,000 and fair market value of $40,000 for Faulkner's land w 4. a cost of $7.,500 and fair market value of $38,000. Faulkner also paid Nabokov $2.000 in cash Required, Propared the related jourmal entry Nabokov Company would use to record the cost of the land acquired and any gain or loss on the exchange s. Additions, Improvements, Repairs (5 points) Sharp Company incurred the following expenditures during 2014 April 9 The air conditioning system in the old manufacturing facility was replaced for $41,500. The old air conditioning June 29 Annual maintenance of $6,000 was performed Sep. 12 The roof of the old manufacturing facility is replaced at a cost of $48,750. This expenditure substanbally extended Dec. 28 A new wing was added to the manufacturing facility at a cost of $200,000. This expenditure substantially increased system had a cost of $37,000 and a book value of $1,000. The old air conditioning system had no scrap value. the life of the facility the productive capacity of the plant Required: Prepare journal entries to record Sharp's expenditures for 2014.

Explanation / Answer

Journal entry in books of nabokov is:

Nabokov Company Date Particulars L.F Amount ($) Amount ($) Land 38,000 Cash 2,000 Accumulated depreciation 20,000 Equipment 45,000 Gain on exchange of equipment 15,000 (For equipment exchanged)

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