Nonmonetary Exchanges

Essay

Nonmonetary exchanges.Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings. The following transactions occurred in 2015:March 31, 2015- Negotiations which began in 2014 were completed and a building purchased 1/1/06 (depreciation has been properly charged through December 31, 2014) at a cost of $6,400,000 with a fair value of $4,000,000 was exchanged for a second building which also had a fair value of $4,000,000. The exchange had no commercial substance. Both parcels of land on which the buildings were located were equal in value, and had a fair value equal to book value.June 30, 2015- Machinery with a cost of $720,000 and accumulated depreciation through January 1 of $540,000 was exchanged with $450,000 cash for a parcel of land with a fair value of $690,000. The exchange had commercial substance.
InstructionsPrepare all appropriate journal entries for Moore Corporation for the above dates.