Question

Concept for Analysis 10-4 You have two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance to allow them to record gains. Here are the facts: Client A Client B Original cost $105,500 $144,500 Accumulated depreciation 44,800 30,000 Fair value 73,300 $5.900 Cash received (paid) (12,600) 12.600 for the amounts Record the trade-in on Client A's books assuming the exchange has commercial substance. (If no entry is required, select "No Entry for the account tities and enter Credit account titles are automatically indented when amount is entered. De not indent manually.) Account Titles and Explanation Debit