Company A had a machine with a carrying amount of P450,000.  Company B had a delivery vehicle with a carrying amount of P300,000.  Companies A and B exchanged the machine and vehicle, and Company B paid an additional P90,000 cash as part of the exchange.  Assume that the fair value of the delivery vehicle is P420,000.  The exchange has commercial substance. How much gain or loss should be recorded by Company A? P120,000 gain P120,000 loss P30,000 loss P60,000 gain

Q: A and B have an exchange with no commercial substance. The equipment given up by A has a historical…

A: Exchange of Assets It is important to recognize gain or loss at the time of exchange of assets…

Q: Sheridan Company traded machinery with a book value of $746650 and a fair value of $685000. It…

A: Commercial substance: It exists in business transactions where the outcome is anticipated to cause…

Q: Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old…

A: If the transaction has commercial substance, new asset will be recorded at its fair value and any…

Q: Love Inc. and Life Co. have an exchange with no commercial substance. The asset given up by Love…

A: Book value of asset given up = P12,000 Cash paid = P4,000 Amount to be recorded by Love Inc. = Book…

Q: Manama Co, and Muharraq Co. have an exchange with no commercial substance. The asset given up by…

A: Amount Manama should record for the assets received = Book value of assets given + cash paid

Q: f a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a…

A: Answer : gain recognized on exchange of asset = $ 40,000

Q: Parr Company traded in a used delivery truck with a carrying amount of P54,000 fora new delivery…

A: If exchange have commercial substance, the value of new assets  will be recorded at faie value of…

Q: 1. Ibrahim is paid P54,000, and the excess amount paid over Ibrahim's capital account balance is…

A: When a partner withdraws from the business of the entity or when any partner take admission in…

Q: Payor Inc. and Recipient Co. have an exchange with no commercial substance. The asset given up by…

A: In case of exchange transaction lacks commercial substance or fair value of neither the asset given…

Q: Marigold Corp. received $135000 in cash and a used computer with a fair value of $303000 from…

A: Formula: Gain on exchange = Cash received on exchange + fair value of computer - Undepreciated.…

Q: ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a…

A: If an exchange has commercial substance then it should be accounted for the fair value. Gain is…

Q: Amble Inc. exchanged a truck with a book value of $12,000 and a fair value of $20,000 for a truck…

A: When a fixed asset is exchanged for another fixed asset and the exchange has commercial substance,…

Q: Assuming that the trade-in allowance is $225,000, what is the amount of cash given? Assuming that…

A: Net purchase price= Fair value -Trade in allowance Gain or loss on exchange= Trade in allowance-…

Q: Hoyle Company traded machinery with a book value of $680,000 and a fair value of $720,000. In…

A: Book value (also known as the carrying value) is the amount at which an asset is being reported in…

Q: Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a…

A: Loss or gain on the exchange = Fair value of asset - Book value of asset

Q: On March 31, 2005 JJ Enterprise traded in an old machine having a carrying amount of P1,600,000 and…

A: Total loss recognized on exchange = carrying amount of old machine + cash paid -  total cash price…

Q: On January 1, 2022, J Company acquired an intangible asset from a foreign company. The invoice price…

A: The cost of a separately acquired intangible asset comprise: a) its purchase price, including import…

Q: Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old…

A: Kaohsiung company exchanges its old office equipment and $85,000 for new office equipment. The old…

Q: What amount of gain should Cullumber recognize on the exchange (assuming lack of commercial…

A: amount of gain should Cullumber recognize on the exchange (assuming lack of commercial substance)…

Q: FAITH Inc and HOPE Co. have an exchange with no commercial substance. The asset given up by FAITH…

A: Here discussing the factors of exchanging the assets with no commercial substance with this on the…

Q: On March 31, 2019, ABC Enterprises traded in an old machine having a carrying amount of P1,600,000…

A: Assets means the resources owned by company. When amount received at the time of sale of assets is…

Q: Sheffield Inc. and Pharoah Co. have an exchange with no commercial substance. The asset given up by…

A: When there is  no commercial substance, asset should be recorded at the book value of asset given…

Q: King Corp. traded an old machine with book value of $60,000 (original cost $110,000) and a fair…

A: Gain on machine = Fair value of machine exchanged - book value of old machine = 90000-60000 =…

Q: X-ray company traded in an old machine having a carrying amount of 16,800 and paid a cash difference…

A: It is pertinent to note that if Property, Plant and Equipment is acquired in exchange of a…

Q: Alamos Co. exchanged equipment and $17,000 cash for similar equipment. The book value and the fair…

A: When ever an Equipment has a commercial substance then the Equipment is to be recorded at Fair value…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Calculate the amount at which Calaveras value the pickup trucks.

Q: ABC Inc. and XYZ Co. have an exchange with no commercial substance. The asset given up by ABC Inc.…

A: An exchange has commercial substance if an entity expects the likelihood, the timing, or quantity of…

Q: Bonita Industries traded machinery with a book value of $1110200 and a fair value of $1820000. It…

A: Commercial substance in a exchange transaction means when expectation is such that future cash flows…

Q: ZY Corporation exchanges its old equipment and USD100,000 cash for new equipment. The old equipment…

A: The cost of new equipment is calculated as sum of book value of old asset and cash paid for…

Q: amount of loss

A: Carrying amount of the old machine P16,800 Cash difference paid P6,000 Total cash price of the…

Q: Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the…

A: Calculate the amount at which Calaveras value the pickup trucks.

Q: Rain Company traded a manual weather machine for an automated weather machine and gave $40,000 cash.…

A: Rain Company Shine Company  Cost $495,000 $510,000 Accumulated Depreciation (Bal. Fig.)…

Q: Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20…

A: The carrying value of an asset is the value at which the company records the asset in its balance…

Q: ABC Co. traded a used equipment with a book value of P6,800 and a fair market value of P9,200 for a…

A: Here the problem relating to the exchange of fixed assets.  To record the transaction for old…

Q: Bonnie Inc. and Clyde Company have an exchange with no commercial substance. The asset given up by…

A: If exchange lacked commercial , there will be no profit or loss and exchange will be recorded at…

Q: Yin Co traded in an old machine having a carrying amount of P16,800, and paid a cash difference of…

A: Carrying value of an asset refers to the value that is the difference of original cost of asset and…

Q: Harris Ltd. exchanged a parcel of land with a carrying value of $15 million and fair value of $20…

A: The carrying value of an asset is the value at which the company records the asset in its balance…

Q: Coronado Inc. and Wildhorse Co. have an exchange with no commercial substance. The asset given up by…

A: Formula: Realized gain = Fair value - Asset book value.

Q: C Inc. and D Co. have an exchange with no commercial substance. The asset given up by C Inc. has a…

A: If exchange has no commercial substance, there will be no profit or loss and exchange will be…

Q: Jersey Inc. and Texas Co. have an exchange with no commercial substance. The asset given up by…

A: The old assets given up by the company are recorded at book value of the particular asset.

Q: Cullumber Company traded machinery with a book value of $525000 and a fair value of $1025000. It…

A: The company is required to record  a gain in the books of accounts for the exchange of assets if the…

Q: Alvarez and Reymond, both NGAs, exchanged their equipment. Relevant data is presented below…

A: Calculation of Initial Value of New Asset Initial value of New Asset       Fair Value of…

Q: Vaughn Inc. and Cullumber Co. have an exchange with no commercial substance. The asset given up by…

A: Value of assets received = Book value of assets Given + Cash paid/Value of assets given

Q: XYZ Company exchanges the rights to distribute a product in Brisbane which have a carrying amount of…

A: The question is related to acquisition of Intangible asset in exhange for another Intangible asset.…

Q: Jowee Company exchanged an old machine, costing P3,000,000 and 50% depreciated, for a used machine…

A: Where an asset is exchanged with another asset and the new assets is expected to have commercial…

Q: Tainan company decides to exchange its old machine and $2,600,000 cash for a new machine. The old…

A: An exchange between two parties means when one party provides something, the other party also…