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On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as Asset A, and Wiggins' is referred to
On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these
assets.
Original cost
Accumulated depreciation (to date of exchange)
Fair value at date of exchange
Cash paid by Hyde, Inc.
Cash received by Wiggins, Inc.
Asset A
$96,000
40,000
60,000
15,000
Asset B
$110,000
47,000
75,000
15,000
Required:
- Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
- Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these
assets.
Original cost
Accumulated depreciation (to date of exchange)
Fair value at date of exchange
Cash paid by Hyde, Inc.
Cash received by Wiggins, Inc.
Asset A
$96,000
40,000
60,000
15,000
Asset B
$110,000
47,000
75,000
15,000
Required:
- Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
- Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
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