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.

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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