Reference no: EM131815928

Question: On August 1, Monty, Inc. exchanged productive assets with Flounder, Inc. Monty's asset is referred to below as "Asset A," and Flounder' is referred to as "Asset B." The following facts pertain to these assets. Asset A Asset B Original cost $101,760 $116,600 Accumulated depreciation (to date of exchange) 42,400 49,820 Fair value at date of exchange 63,600 79,500 Cash paid by Monty, Inc. 15,900 Cash received by Flounder, Inc. 15,900 1. Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Monty, Inc. and Flounder, Inc. in accordance with generally accepted accounting principles 2. Assuming that the exchange of Assets A and B lacks commercial substance, record the exchange for both Monty, Inc. and Flounder, Inc. in accordance with generally accepted accounting principles.