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Cullumber Engineering Corporation purchased conveyor equipment with a list price of $52,200. Three independent cases...

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Accounting

Cullumber Engineering Corporation purchased conveyor equipment with a list price of $52,200. Three independent cases that are related to the equipment follow. Assume that the equipment purchases are recorded gross.

1. Geddes paid cash for the equipment 25 days after the purchase, along with 5% GST (recoverable) and provincial sales tax of $3,500, both based on the purchase price. The vendors credit terms were 2/10, n/30.
2. Geddes traded in equipment with a book value of $2,100 (initial cost $40,200), and paid $40,800 in cash one month after the purchase. The old equipment could have been sold for $8,230 at the date of trade, but was accepted for a trade-in allowance of $9,200 on the new equipment.
3. Geddes gave the vendor a $9,800 cash down payment and a 10% note payable with blended principal and interest payments of $15,300 each, due at the end of each of the next two years.

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