0. The estimated useful life of the machine is 10 years, with no residual value. On the date of the exchange, Machine G’s fair value is ₱680,000. EYCH’s machine (Machine H) was purchased on January 1, 2018, for ₱2,500,000. The estimated useful life of the machine is 5 years, with no residual value. The fair value of Machine H on the date of exchange is ₱2,100,000. Because of the difference in the fair values, included in the agreement is a stipulation wherein GEE
GEE Company and EYCH Inc. decided to exchange machineries on January 1, 2019. The machine of GEE (Machine G) was purchased in January 1, 2016 for ₱1,000,000. The estimated useful life of the machine is 10 years, with no residual value. On the date of the exchange, Machine G’s fair value is ₱680,000. EYCH’s machine (Machine H) was purchased on January 1, 2018, for ₱2,500,000. The estimated useful life of the machine is 5 years, with no residual value. The fair value of Machine H on the date of exchange is ₱2,100,000. Because of the difference in the fair values, included in the agreement is a stipulation wherein GEE shall pay ₱1,500,000. The exchange is considered to be with commercial substance. How much is the gain(loss) from exchange that should be recognized by GEE Company?
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