On April 1 of the Current Year,a Company Traded an Old

question 80

Essay

On April 1 of the current year,a company traded an old machine that originally cost $32,000 and that had accumulated depreciation of $24,000 for a similar new machine that had a cash price of $40,000.
a.Give the entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance of $35,000 was paid in cash.
b.Give the entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance,a $12,500 trade-in allowance was received and the balance of $27,500 was paid in cash.

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Definitions:

Void

In legal terms, Void refers to something that is legally null, without legal effect, or unenforceable from the outset.

Charter of Rights and Freedoms

A foundational document in Canada that guarantees fundamental freedoms and rights to its citizens.

Status Indians

In Canada, refers to individuals who are legally recognized as Indians under the Indian Act, affording them certain rights and benefits not available to non-Status Indians.

Capacity to Contract

The legal ability of a person to enter into a binding agreement, often requiring the individual to be of a certain age and sound mind.