Hoyle Company owns a manufacturing plant with a fair value of $4,600,000, a recorded cost of...
Hoyle Company owns a manufacturing plant with a fair value of $4,600,000, a recorded cost of $8,500,000, and accumulated depreciation of $3,650,000. Patterson Company owns a warehouse with a fair value of $4,400,000, a recorded cost of $6,900,000, and accumulated depreciation of $2,800,000. Hoyle and Patterson exchange assets with Hoyle also receiving cash of $200,000 from Patterson. The exchange is considered to have commercial substance.
Required:
Record the exchange on the books of:
- Hoyle
- Patterson
Homework Answers
In the books of Hoyle
| Particulars | Debit | Credit |
|---|---|---|
| Warehouse | 4,400,000 | |
| Cash | 200,000 | |
| Accumulated depreciation | 3,650,000 | |
| Loss on sale of asset | 250,000 | |
| Manufacturing plant | 8,500,000 |
In the books of Patterson
| Particulars | Debit | Credit |
|---|---|---|
| Manufacturing plant | 4,600,000 | |
| Accumulated depreciation | 2,800,000 | |
| Gain on sale of asset |
300,000 |
|
| Warehouse | 6,900,000 | |
| Cash | 200,000 |
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