Problem 2J & J is considering replacing some of their older computers.Give the potential...Problem...

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Accounting

Problem 2
J & J is considering replacing some of their older computers.Give the potential entries given the following scenarios. Assumeall scenarios are independent (B is not independent from A) andhave commercial substance.

a. Fourteen new computers - $140,000, additional $2,000 for freightand 6% tax on $140,000. Estimated useful life is 5 years with 5%salvage value. They are treated as a single unit for financialreporting purposes. No trade-ins.
b. Ten existing computers will be traded in (total trade-in value$10,000) for the new computers. The computers are treated as asingle unit with an original cost of $80,000 and book value of$8,000. The remainder was paid in cash. They are treated as asingle unit for financial reporting purposes

c. Ten existing computers will be traded in (total trade-in value$20,000) for the new computers. The computers are treated as asingle unit with an original cost of $80,000 and book value of$20,000. The remainder was paid in cash. They are treated as asingle unit for financial reporting purposes

Required:
Prepare the potential journal entries for the above events.
Part B is not independent from A. Please show all calculations.Thanks

Answer & Explanation Solved by verified expert

4.4 Ratings (658 Votes)

a Fourteen new computers 140000 additional 2000 for freight and 6 tax on 140000 Estimated useful life is 5 years with 5 salvage value They are treated as a single unit for financial reporting purposes No tradeins Date General See Answer

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In: AccountingProblem 2J & J is considering replacing some of their older computers.Give the potential...Problem 2J & J is considering replacing some of their older computers.Give the potential entries given the following scenarios. Assumeall scenarios are independent (B is not independent from A) andhave commercial substance.a. Fourteen new computers - $140,000, additional $2,000 for freightand 6% tax on $140,000. Estimated useful life is 5 years with 5%salvage value. They are treated as a single unit for financialreporting purposes. No trade-ins.b. Ten existing computers will be traded in (total trade-in value$10,000) for the new computers. The computers are treated as asingle unit with an original cost of $80,000 and book value of$8,000. The remainder was paid in cash. They are treated as asingle unit for financial reporting purposesc. Ten existing computers will be traded in (total trade-in value$20,000) for the new computers. The computers are treated as asingle unit with an original cost of $80,000 and book value of$20,000. The remainder was paid in cash. They are treated as asingle unit for financial reporting purposesRequired:Prepare the potential journal entries for the above events.Part B is not independent from A. Please show all calculations.Thanks