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