accounting homework

A machine cost $250,200, has annual depreciation expense of $50,040, and has accumulated depreciation of $125,100 on December 31, 2014. On April 1, 2015, when the machine has a fair value of $102,370, it is exchanged for a similar machine with a fair value of $289,100 and the proper amount of cash is paid. The exchange lacked commercial substance.

Prepare all entries that are necessary at April 1, 2015. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
April 1, 2015	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To record depreciation.)
April 1, 2015	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To record exchange of machineries.)

Assume in each case that the selling expenses are $8 per unit and that the normal profit is $5 per unit. Calculate the limits for each case. Then enter the amount that should be used for lower of cost or market.

Selling Price

Upper Limit

Replacement Cost

Lower Limit

Cost

LCM

(a)

$54

$[removed]

$38

$[removed]

$42

$[removed]

(b)

47

[removed]

36

[removed]

40

[removed]

(c)

56

[removed]

39

[removed]

40

[removed]

(d)

48

[removed]

42

[removed]

40

[removed]