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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Exchange of Assets Minor Baseball Company had a player contract with Doe that was recorded in its accounting records at $145,000. Better Baseball Company had a player contract with Smith that was recorded in its accounting records at $140,000. Minor traded Doe to Better for Smith by exchanging each player’s contract. The fair l value of each contract was $150,000.

Required:

What amounts should each company show in its accounting records for the exchange of player contracts?

To determine

State the amounts shown by each company in its accounting records for the exchange of player contracts.

Explanation

Nonmonetary exchange:

Nonmonetary exchange is a reciprocal transfer among a company and another organization wherein, the company obtains nonmonetary assets or services by surrendering other nonmonetary assets or services.

  • Company M values Person S’ contract at $150,000 and Company B values Person D’s contract at $150,000...

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