Question - Delmar Company and Hamilton Company exchanged forklifts on january 1, 2011. Delmar's forklift cost $33,600, had accumulated depreciation of $27,600, and has a fair market value of $3,600. Hamilton's forklift cost $25,200, had accumulated depreciation of $21,600, and has a fair market value of $3,600.
Instructions:
a- Journalize the exchange for Delmar Company.
b- Journalize the exchange for Hamilton Company.
Question - Abco Company purchased on account farm equipment from Norway Corp. with an invoice price of $96,000. Other costs incurred were freight costs, $1,320; installation wiring and foundation, $2,640; material and labor costs in testing equipment, $8400; oil lubricants and supplies to be used with equipment, $600; fire insurance policy covering equipment, $1,680. The equipment is estimated to have a $6,000 salvage value at the end of its 8 year useful service life.
Instruction: Compute the acquisition cost of the equipment and prepare the journal entry to record the purchase.