Machinery Acquired at a Cost of $80,000 and on Which $\$ 120,000$

question 223

Essay

Machinery acquired at a cost of $80,000 and on which there is accumulated depreciation of $55,000 (including depreciation for the current year to date) is exchanged for similar machinery. Assume that the transaction has commercial substance. For financial reporting purposes, present entries to record the exchange of the machinery under each of the following assumptions: (a) Frice of new, $\$ 120,000$ ; trade-in allowance on old, $\$ 4,000$ ; balance paid in cash.
(b) Price of new, $\$ 120,000$ ; trade-in allowance on old, $\$ 34,000$ ; bal ance paid in cash.

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Definitions:

Species Diversity

The variety and abundance of different species within a given area, crucial for ecosystem health and resilience.

Terrestrial Biomes

Large geographic regions defined by the dominant plant life and climate, including forests, deserts, grasslands, and tundra.

Mature Taiga

A biome characterized by dense forests of conifers in the northern regions that have reached a mature ecological stage with complex ecosystems.

Mature Tropical Rain Forest

A type of forest found in the tropics characterized by high levels of rainfall, biodiversity, and old, fully developed trees.