1) Question 3 of 3 < -72 View Policies Current Attempt in Progress The production manager of Marigold Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using

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1) Question 3 of 3 < -72 View Policies Current Attempt in Progress The production manager of Marigold Corporation wants to acquire a different brand of machine by exchanging the machine that it currently uses in operations for the brand of equipment that others in the industry are using. The brand being used by other companies is more comfortable for the operators because it has different attachments that allow the operators to adjust the controls for a variety of arm and hand positions. The production manager has received the following offers from other companies: 1. Secord Corp. offered to give Marigold a similar machine plus $ 21,850 in exchange for Marigold's machine. 2. Bateman Corp. offered a straight exchange for a similar machine with essentially the same value in use. 3. Shripad Corp. offered to exchange a similar machine with the same value in use, but wanted $ 7,600 cash in addition to Marigold's machine. Assume that the exchange is nonmonetary and lacks commercial substance. 4. The production manager has also contacted Ansong Corporation, a dealer in machines. To obtain a new machine from Ansong, Marigold would have to pay $ 88,350 and also trade in its old machine. Marigold's equipment has a cost of $ 152,000, a net book value of $ 104,500, and a fair value of $ 87,400. The following table shows the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $ 114,000 $ 139,650 $152,000 $ 123,500 Accumulated depreciation-machinery 42,750 67,450 71,250 -0- Question 3 of 3 < > -/2 ili the information needed to record the machine exchange between the companies: Secord Bateman Shripad Ansong Machine cost $ 114,000 $ 139,650 $ 152,000 $ 123,500 Accumulated depreciation-machinery 42,750 67,450 71,250 -0 Fair value 65,550 87,400 95,000 175,750 Part 1 For each of the four independent situations, assume that Marigold accepts the offer. Prepare the journal entries to record the exchange on the books of each company. Assume that transactions 2 and 3 lack commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Transaction 1: Marigold Corporation Account Titles and Explanation Debit Credit Cash 21,850 f Ch 10: Homework Part 1 Question 3 of 3 < -/2 For each of the four independent situations, assume that Marigold accepts the offer. Prepare the journal entries to record the exchange on the books of each company. Assume that transactions 2 and 3 lack commercial substance for Bateman Company and Shripad Company respectively. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Transaction 1: Marigold Corporation Account Titles and Explanation Debit Credit Cash 21.850 Machinery 65,550 Accumulated Depreciation - Machinery Loss on Disposal of Machinery Machinery 152,000 Secord Company Account Titles and Explanation Debit Credit Question 3 of 3 < > -72 III Machinery 152.000 Secord Company Account Titles and Explanation Debit Credit Machinery 87,400 Accumulated Depreciation - Machinery 42.750 Loss on Disposal of Machinery 5,700 Cash 21.850 Machinery 114,000 Transaction 2: Marigold Corporation Account Titles and Explanation Debit Credit