Prepare the Journal Entries to Record the Following Transactions for Ogleby

question 26

Essay

Prepare the journal entries to record the following transactions for Ogleby Company which has a calendar year end and uses the straight-line method of depreciation.
a) On September 30, 2018, the company exchanged old delivery equipment and $36,000 for new delivery equipment. The old delivery equipment was purchased on January 1, 2016, for $126,000 and was estimated to have an $18,000 salvage value at the end of its 5-year life. Depreciation on the delivery equipment has been recorded through December 31, 2017. It is estimated that the fair value of the old delivery equipment is $54,000 on September 30, 2018.
(b) On June 30, 2018, the company exchanged old office equipment and $40,000 for new office equipment. The old office equipment originally cost $80,000 and had accumulated depreciation to the date of disposal of $35,000. It is estimated that the fair value of the old office equipment on June 30 was $60,000. The transaction has commercial substance.

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Definitions:

Globalization

The process of interaction and integration among people, companies, and governments worldwide, fostering global trade and the exchange of ideas.

Foreign Capital

Investment funds originating from outside a country, used to finance domestic business operations and economic development.

World Trade Organization

An international organization that regulates international trade and ensures that trade flows as smoothly, predictably, and freely as possible.

Minimal Restrictions

Regulatory or policy conditions that impose the least possible limitations or constraints on actions or operations.