Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these assets is as follows: Prince Albert Original acquisition cost 1,500,000 800,000 Accumulated depreciation 700,000 720,000 Fair value on date of exchange 900,000 150,000 In accordance with the agreement, Albert will pay P750,000 in cash to Prince which is the difference in fair value. Requirements: 1. Assuming the exchange lack commercial substance, what amount should Prince Company record as cost of the asset received in exchange? 2. Assuming the exchange lack commercial substance, what amount should Albert Company record as cost of the asset received in exchange?
Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these assets is as follows:
Prince Albert
Original acquisition cost 1,500,000 800,000
Fair value on date of exchange 900,000 150,000
In accordance with the agreement, Albert will pay P750,000 in cash to Prince which is the difference in fair value.
Requirements:
1. Assuming the exchange lack commercial substance, what amount should Prince Company record as cost of the asset received in exchange?
2. Assuming the exchange lack commercial substance, what amount should Albert Company record as cost of the asset received in exchange?
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Indicate the appropriate entries for Prince Company and Albert Company respectively
by Bartleby Expert
Prince Company and Albert Company agreed to exchange tractor trailers. Information relating to these assets is as follows:
Prince Albert
Original acquisition cost 1,500,000 800,000
Fair value on date of exchange 900,000 150,000
In accordance with the agreement, Albert will pay P750,000 in cash to Prince which is the difference in fair value.
Requirements:
Indicate the appropriate journal entries each for Prince Company and Albert Company respectively
by Bartleby Expert
