Originally Donkey has 5 bags and the Horse has 7 bags.

• Let numbers of bags donkey have be x and for horse be y.
• According to first statement,

       2(x-1) = y+1    ............(i)

• According to the second statement,

       (x+1) = (y-1)    ..........(ii)

• Solving (i) and (ii),

       x = 5 and y = 7

• Thus, number of bags donkey have = 5 and number of bags horse have = 7