During the current year, Marshall Construction trades an old crane that has a book value...
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Accounting
During the current year, Marshall Construction trades an old crane that has a book value of $90,000 (original cost $140,000 less accumulated depreciation $50,000) for a new crane from Brigham Manufacturing Co. The new crane cost Brigham $70,000 to manufacture and is classified as inventory. The following information is also available
Marshall Const. Brigham Mfg. Co.
Fair value of old crane $97,000
Fair value of new crane $87,300
Cash paid 9,700
Cash received 9,700
Instructions (a) Assuming this exchange lacks commercial substance for Marshal, prepare the journal entries on the books of Marshall Construction. (b) Now assume that $103,000 cash is paid (instead of $9,700 received), the fair value of the new crane is not specified, and other conditions remain the same. Prepare the journal entries on the books of Marshall Construction.
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