Explore BrainMass

Explore BrainMass

    On August 1, Hyde Inc. exchanged productive assets with Wigg

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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
    Accum. depreciation to date 40,000 47,000
    of exchange

    Fair Value at date of exchange 60,000 75,000
    Cash paid by Hyde Inc. 15,000
    Cash received by Wiggins 15,000

    1. Assuming that the exchange of Assets A and B
    has commercial substance, record the exchange for both Hyde and Wiggins.
    2. Assuming the exchange lacks commercial substance, record the exchange for both Hyde and Wiggins

    © BrainMass Inc. brainmass.com June 4, 2020, 1:46 am ad1c9bdddf
    https://brainmass.com/business/accounting/on-august-1-hyde-inc-exchanged-productive-assets-with-wigg-419373

    Solution Preview

    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

    ...

    Solution Summary

    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
    Accum. depreciation to date 40,000 47,000
    of exchange

    Fair Value at date of exchange 60,000 75,000
    Cash paid by Hyde Inc. 15,000
    Cash received by Wiggins 15,000

    1. Assuming that the exchange of Assets A and B
    has commercial substance, record the exchange for both Hyde and Wiggins.
    2. Assuming the exchange lacks commercial substance, record the exchange for both Hyde and Wiggins

    $2.19

    ADVERTISEMENT