Nonmonetary exchange
Response to the following problem:
On September 3, 2016, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows:
|
|
Robers' Asset
|
Phifer's Asset
|
|
Original cost
|
$120,000
|
$140,000
|
|
Accumulated depreciation
|
55,000
|
63,000
|
|
Fair value
|
75,000
|
70,000
|
To equalize the exchange, Phifer paid Robers $5,000 in cash.
Required:
Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.