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air value of P1,000,000 and carrying value of P1,200,000.  DEF paid P700,000 cash to ABC.   If the exchange has commercial substance, DEF would recognize gain (loss) on exchange of:   900,000 (900,000)

air value of P1,000,000 and carrying value of P1,200,000.  DEF paid P700,000 cash to ABC.   If the exchange has commercial substance, DEF would recognize gain (loss) on exchange of:   900,000 (900,000)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Company exchanged equipment with DEF Corp. The following data were available:

ABC's equipment had a carrying value of P3,500,000 and fair value of P1.875,000. 

DEF's equipment has a fair value of P1,000,000 and carrying value of P1,200,000. 

DEF paid P700,000 cash to ABC.

 

If the exchange has commercial substance, DEF would recognize gain (loss) on exchange of:

 

900,000

(900,000)

200,000

(200,000)

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