Moist Company exchanged machinery with an appraised value of $5,000,000, cost of $6,500,000 and accumulated depreciation of $2,700,000 with Dry Corporation for machinery Dry owns. The machinery has an appraised value of $4,600,000, cost of $9,300,000, and accumulated depreciation of $5,100,000. Dry also gave Moist $400,000 in the exchange. Assume depreciation has already been updated. 1. Prepare the entries on both companies' books assuming that the exchange had commercial substance. (Round all computations to the nearest dollar.) 2. Prepare the entries on both companies' books assuming that the exchange lacked commercial substance. (Round a computations to the nearest dollar.)

Moist Company exchanged machinery with an appraised value of $5,000,000, cost of $6,500,000 and accumulated depreciation of $2,700,000 with Dry Corporation for machinery Dry owns. The machinery has an appraised value of $4,600,000, cost of $9,300,000, and accumulated depreciation of $5,100,000. Dry also gave Moist $400,000 in the exchange. Assume depreciation has already been updated. 1. Prepare the entries on both companies' books assuming that the exchange had commercial substance. (Round all computations to the nearest dollar.) 2. Prepare the entries on both companies' books assuming that the exchange lacked commercial substance. (Round a computations to the nearest dollar.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6MC: Ashton Company exchanged a nonmonetary asset with a cost of 30,000 and accumulated depreciation of...

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