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Answer:
1. In the books of SHERIDAN
Dr Cash $25,300
Dr Machinery $75,900
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal $8,800
Cr Machinery $176,000
In the books of SKYSONG
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $49,500
Dr Loss on disposal $6,600
Cr Cash $25,300
Cr Machinery $132,000
2. In the books of SHERIDAN
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal $8,800
Cr Machinery $176,000
In the books of CONCORD
Dr Machinery $89,100
Dr Accumulated Depreciation - Machinery $78,100
Cr Machinery $167,200
3. In the books of SHERIDAN
Dr Machinery 104,500
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal $8,800
Cr Cash $3,300
Cr Machinery $176,000
In the books of MARIGOLD
Dr Cash $3,300
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $82,500
Cr Machinery $176,000
Cr Gain on disposal $11,000
4.In the books of SHERIDAN
Dr Machinery $203,500
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal $8,800
Cr Cash $102,300
Cr Machinery $176,000
In the books of SWIFTY
Dr Cash $102,300
Dr Inventory $101,200
Cr Sales Revenue $203,500
Dr Cost of Goods Sold $143,000
Cr Inventory $143,000
Explanation:
Preparation of the journal entries to record the exchange on the books of each company
1.Preparation of the journal entries in the books of purchaser and seller as follows
In the books of SHERIDAN
Dr Cash $25,300
Dr Machinery $75,900
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal ($176,000 − $25,300 − 75,900 − 66,000) $8,800
Cr Machinery $176,000
(To record exchange of machinery)
In the books of SKYSONG
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $49,500
Dr Loss on disposal ($132,000 + $25,300 − 101,200 − 49,500) $6,600
Cr Cash $25,300
Cr Machinery $132,000
(To record exchange of machinery)
2. Preparation of the journal entries in the books of purchaser and seller
In the books of SHERIDAN
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal ($176,000 − $101,200 − $66,000) $8,800
Cr Machinery $176,000
(To record exchange of machinery)
In the books of CONCORD
Dr Machinery ($167,200 − $78,100) $89,100
Dr Accumulated Depreciation - Machinery $78,100
Cr Machinery $167,200
(To record exchange of machinery)
3. Preparation of the journal entries in the books of purchaser and seller
In the books of SHERIDAN
Dr Machinery 104,500
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal ($176,000 + $3,300 − $104,500 − $66,000) $8,800
Cr Cash $3,300
Cr Machinery $176,000
(To record exchange of machinery)
In the books of MARIGOLD
Dr Cash $3,300
Dr Machinery $101,200
Dr Accumulated Depreciation - Machinery $82,500
Cr Machinery $176,000
Cr Gain on disposal ($176,000 − 101,200 − 82,500 − $3,300 ) $11,000
(To record exchange of machinery)
4. Prepare the journal entries in the books of purchaser and seller as follows
In the books of SHERIDAN
Dr Machinery $203,500
Dr Accumulated Depreciation - Machinery $66,000
Dr Loss on disposal ($176,000 + $102,300 − $203,500 − $66,000) $8,800
Cr Cash $102,300
Cr Machinery $176,000
(To record exchange of machinery)
In the books of SWIFTY
Dr Cash $102,300
Dr Inventory $101,200
Cr Sales Revenue $203,500
(To record sales revenue)
Dr Cost of Goods Sold $143,000
Cr Inventory $143,000
(To record cost of goods sold)
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