Question

Sage Const.

Pronghorn Mfg. Co.

(a)

No.

Account Titles and Explanation

Debit

Credit

1.

Sage Construction

2.

Pronghorn Manufacturing

Open Show Work

During the current year, Sage Construction trades an old crane that has a book value of $109,800 (original cost $170,800 less accumulated depreciation $61,000) for a new crane from Pronghorn Manufacturing Co. The new crane cost Pronghorn $201,300 to manufacture and is classified as inventory. The following information is also available.

 

 

Sage Const.

 

Pronghorn Mfg. Co.

Fair value of old crane

 

$100,040

 

 

 

 

Fair value of new crane

 

 

 

 

$244,000

 

Cash paid

 

143,960

 

 

 

 

Cash received

 

 

 

 

143,960

 

             

 

 



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