Nonmonetary Exchanges on August 1, Hyde, Inc. exchanged producti

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 B

Original cost                                                                    $96,000        $110,000

Accumulated depreciation (to date of exchange)       40,000             47,000

Fair value at date of exchange                                       60,000             75,000

Cash paid by Hyde, Inc.                                                   15,000                         

Cash 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.

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