1. Nonmonetary Exchanges on August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hyde's asset are referred to below as "Asset A," and Wiggins' is referred to as "Asset B." The following facts pertain to these assets.
Asset A Asset BOriginal cost $96,000 $110,000Accumulated depreciation (to date of exchange) 40,000 47,000Fair value at date of exchange 60,000 75,000Cash paid by Hyde, Inc. 15,000Cash received by Wiggins, Inc. 15,000
(a) 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.
(b) 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.