QUESTION 4: NON-MONETARY TRANSACTION - 16 marks

Grove Corp. exchanged a building on Main Street, which has an appraised value of $1,700,000, a cost of $2,800,000, and accumulated depreciation of $1,300,000, for a building on King Street, which belongs to Tree Ltd. The King Street building has an appraised value of $1,620,000, a cost of $3,100,000, and accumulated depreciation of $1,750,000. Tree Ltd. paid Grove Corp. $80,000 as part of the exchange.Depreciation has been updated to the date of the exchange.

Instructions

Prepare the entries on both companies' books, assuming that the exchange lacks commercial substance.