1. Anchor Klanker Company sold equipment on June 30, 2005 for $70,000. The equipment had cost $100,000 and had $50,000 of accumulated depreciation as of January 1, 2005. Depreciation for the first 6 months of 2005 was $5,000. Prepare the journal entry to record the sale of the equipment.
2. Rum Dum and Company originally purchased a dump truck for $66,000. The truck had a 10-year useful life, and the accumulated depreciation was $30,000 when they sold the truck for $25,000. Prepare the journal entry to record the sale of the truck.
3. Presented below are two independent transactions.
1. Ima Knucklehead exchanged old trucks (cost $75,000 less $22,000 accumulated depreciation) plus cash of $17,000 for new trucks. The old trucks had a fair market value of $39,000.
2. Yura Dingaling trades its used machine (cost $14,000 less $6,000 accumulated depreciation) for a new machine. In addition to exchanging the old machine (which had a fair market value of $12,000), Yura also paid cash of $5,000.
Instructions
(a) Prepare the entry to record the exchange of similar assets by Ima Knucklehead.
(b) Prepare the entry to record the exchange of similar assets by Yura Dingaling.