On August 1, Gold Company Exchanged a Machine for a Similar

question 81

Essay

On August 1, Gold Company exchanged a machine for a similar machine owned by Cowboy Company and also received $7,000 cash from Cowboy Company.Gold's machine had an original cost of $70,000, accumulated depreciation to date of $34,500, and a fair market value of $60,000. Cowboy's machine had a book value of $45,000 and a fair value of $53,000.
Required:
Prepare the necessary journal entry by Gold Company to record this transaction assuming
a.Gold will use the newly acquired machine in the same manner as the old one.
b.Gold's use of the new machine will be substantially different from the old one.

---

Definitions:

Alternative Evaluation

The phase in the consumer decision-making process where options are assessed and compared before a purchase decision.

Secondary Research

The process of gathering and analyzing existing data that was collected by another person or organization, such as reports, studies, or statistics, saving time and expense compared to conducting primary research.

Decision-making Process

The cognitive process leading to the selection of a belief or course of action among several possible alternative options.

Market

Definition: A defined area or arena in which commercial dealings occur, including buying, selling, and exchange of goods or services.