Question
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange in which no cash changes hands. The following information
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available:
| Denver | Bristol | |
|---|---|---|
| Cost | $80,000 | $31,500 |
| Accumulated depreciation | 60,000 | 25,000 |
| Fair value | 17,000 | 17,000 |
Required:
| 1. | Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange. |
| 2. | Assuming the exchange does not have commercial substance, prepare journal entries for Denver and Bristol to record the exchange. |
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Auditing ISO Management System
Authors: Dr. RAMESH R LAKHE, Dr. RAKESH L. SHRIVASTAVA, M M NAVEED, KRANTI P DHARKAR, Dr. C M SEDANI
1st Edition
1702203913, 978-1702203913
