Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Crane, Inc. and Cheyenne, Inc. in accordance with generally accepted accounting principles.
Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Crane, Inc. and Cheyenne, Inc. in accordance with generally accepted accounting principles.
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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Question
On August 1, Crane, Inc. exchanged productive assets with Cheyenne, Inc. Crane’s asset is referred to below as “Asset A,” and Cheyenne’ is referred to as “Asset B.” The following facts pertain to these assets.
Asset A
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Asset B
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Original cost | $117,120 | $134,200 | ||
48,800 | 57,340 | |||
Fair value at date of exchange | 73,200 | 91,500 | ||
Cash paid by Crane, Inc. | 18,300 | |||
Cash received by Cheyenne, Inc. | 18,300 |
Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Crane, Inc. and Cheyenne, Inc. in accordance with generally accepted accounting principles.
Account Titles and Explanation
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Debit
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Credit
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Crane, Inc.’s Books
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Cheyenne, Inc.’s Books
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