P10-9B (LO5) (Nonmonetary Exchanges) On October 1, Orlando, Inc. exchanged productive assets with Anaheim, Inc. Orlando's asset is referred to below as “Asset A," and Anaheim's is referred to as “Asset B." The following facts pertain to these assets. Asset A Asset B Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Orlando, Inc. Cash received by Anaheim, Inc. $150,000 51,000 105,000 $167,000 52,000 131,000 26,000 26,000 Instructions (a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Orlando, Inc. and Anaheim, 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 Orlando, Inc. and Anaheim, Inc. in accordance with generally accepted accounting principles.
P10-9B (LO5) (Nonmonetary Exchanges) On October 1, Orlando, Inc. exchanged productive assets with Anaheim, Inc. Orlando's asset is referred to below as “Asset A," and Anaheim's is referred to as “Asset B." The following facts pertain to these assets. Asset A Asset B Original cost Accumulated depreciation (to date of exchange) Fair value at date of exchange Cash paid by Orlando, Inc. Cash received by Anaheim, Inc. $150,000 51,000 105,000 $167,000 52,000 131,000 26,000 26,000 Instructions (a) Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Orlando, Inc. and Anaheim, 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 Orlando, Inc. and Anaheim, Inc. in accordance with generally accepted accounting principles.
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 37CE
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT