Reference no: EM131814979

Question - 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.