On August 1, Tamarisk, Inc. exchanged productive assets with Vaughn, Inc. Tamarisk's asset is referred to below as "Asset A Vaughn' is referred to as "Asset B." The following facts pertain to these assets. Asset A Asset B Original cost $126,720 $145,200 Accumulated depreciation (to date of exchange) 52,800 62,040 Fair value at date of exchange 79,200 99,000 Cash paid by Tamarisk, Inc. 19,800 Cash received by Vaughn, Inc. 19.800 (a) Accuming that the exchange of Accots A and B has commercial substance record the exchange for both Tamarick Inc and

On August 1, Tamarisk, Inc. exchanged productive assets with Vaughn, Inc. Tamarisk's asset is referred to below as "Asset A Vaughn' is referred to as "Asset B." The following facts pertain to these assets. Asset A Asset B Original cost $126,720 $145,200 Accumulated depreciation (to date of exchange) 52,800 62,040 Fair value at date of exchange 79,200 99,000 Cash paid by Tamarisk, Inc. 19,800 Cash received by Vaughn, Inc. 19.800 (a) Accuming that the exchange of Accots A and B has commercial substance record the exchange for both Tamarick Inc and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On August 1, Tamarisk, Inc. exchanged productive assets with Vaughn, Inc. Tamarisk's asset is referred to below as "Asset A," and
Vaughn' is referred to as "Asset B." The following facts pertain to these assets.
Asset A
Asset B
Original cost
$126,720
$145,200
Accumulated depreciation (to date of exchange)
52,800
62,040
Fair value at date of exchange
79,200
99,000
Cash paid by Tamarisk, Inc.
19,800
Cash received by Vaughn, Inc.
19,800
(a)
Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Tamarisk, Inc. and Vaughn,
Inc. in accordance with generally accepted accounting principles. (Round answers to O decimal places, e.g. 5,275. Credit account titles
are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles
and enter O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Tamarisk, Inc's Books
Debit
Credit
Vaughn, Inc's Books
>
>
>

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(b)
Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Tamarisk, Inc. and
Vaughn, Inc. in accordance with generally accepted accounting principles. (Do not round intermediate calculations. Round final
answer to O decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually.
If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Tamarisk, Inc.'s Books
Debit
Credit
Vaughn, Inc.'s Books
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