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    (Nonmonetary Exchanges) - On August 1, Hyde, Inc. exchanged productive assets with Wiggins,

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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 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 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.
    (b) 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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    https://brainmass.com/business/accounting/nonmonetary-exchanges-hyde-inc-wiggins-inc-330407

    Solution Preview

    Instruction A
    Hyde, Inc.
    DR: Accumulated depreciation 40,000
    DR: Asset - new 67,000
    DR: Gain 4,000
    CR: Asset - old 96,000
    CR: ...

    Solution Summary

    The solution records the exchange for Hyde, Inc and WIggins, Inc in accordance to accounting principles.

    $2.19

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