Pepitone Inc

question 74

Essay

Pepitone Inc.exchanged a machine costing $400,000 with accumulated depreciation of $280,000 for a machine from the Berra Company.Berra paid $20,800 cash in addition to its machine (which cost $200,000 with accumulated depreciation of $68,000)for the Pepitone machine.The Berra machine has a fair value of $160,000.
Provide the necessary entries to record the transactions on both companies' books assuming the machine lacks commercial substance.

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Definitions:

Middle Class

A social group between the upper and working classes, typically inclusive of professionals, business workers, and others with a moderate to high level of income.

Economic Order

A systematic arrangement of activities and institutions that collectively determine the production, distribution, and consumption of goods and services in a society.

Relative Luminance

A measure of the amount of light that is reflected from or emitted by a surface, viewed from a specific angle, and normalized to a scale from 0 to 1.

Retinal Disparity

The slight difference in the visual images that reach each eye, which is then interpreted by the brain to gauge depth and distance.