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On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred...

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Accounting

On August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset is referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these

assets.

Original cost

Accumulated depreciation (to date of exchange)

Fair value at date of exchange

Cash paid by Hyde, Inc.

Cash received by Wiggins, Inc.

Asset A

$96,000

40,000

60,000

15,000

Asset B

$110,000

47,000

75,000

15,000

Required:

  1. Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.
  2. Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Hyde, Inc. and Wiggins, Inc. in accordance with generally accepted accounting principles.

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