Prepare the entries on both companies books

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Question - Young Company exchanged machinery with Robinson Corporation for machinery Robinson owns. The following is provided for each company's assets in the exchange:

 

Young Company

Robinson Company

Appraised Value

1,462,500

1,412,500

Cost

2,250,000

2,700,000

Accumulated Depreciation

1,125,000

1,485,000

Robinson also gave Young $50,000 in the exchange. Assume depreciation has already been updated.

Required -

1. Prepare the entries on both companies' books assuming that the exchange had commercial substance.

2.  Prepare the entries on both companies' books assuming that the exchange lacked commercial substance.

Reference no: EM133073758

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