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30 December, 11:58

Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Culver, Inc. and Larkspur, Inc. in accordance with generally accepted accounting principles. (Round answers to 0 decimal places, e. g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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  1. 30 December, 15:17
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    Culver, Inc assets

    Assets B. 75,000

    Accumulated Depreciation

    40,000

    Asset A96,000

    Cash. 15,000. Gain on exchange. 4,000

    Larkspur Asset

    (Asset B)

    Asset A. 60,000. Accumulated Depreciation 47,000.

    Cash. 15,000. Asset B. 110,000. Gain on exchange. 12,000. (b) let's say that the exchange of Assets A and B lacks commercial substance, record the exchange for both Culver, Inc. and Larkspur, Inc. in accordance with generally accepted accounting principles.

    Culver's Asset (Asset A)

    Asset B. 71,000

    Accumulated Depreciation

    40,000

    Asset A.

    96,000

    Cash. 15,000

    Larkspur Asset (Asset B)

    Asset A. 50,400

    Accumulated Depreciation

    47,000

    Cash. 15,000

    Asset B. 110,000

    Gain on exchange. 2,400.
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