20.Charles Company has some old equipment that cost P700,000 with an accumulated depreciation of P400,000. The equipment was traded in for a new machine from a dealer company that had a list price of P800,000; however, the new machine could be purchased without trade in for P780,000 cash. Charles Company paid P500,000 cash in the exchange. Determine the following: (1) Initial cost of the newly acquired equipment (2) Gain or loss on exchange a. (1) 800,000; (2) 20,000 gain b. (1) 780,000; (2) 20,000 loss c. (1) 780,000; (2) 0 d. (1) 800,000; (2) 0
20.Charles Company has some old equipment that cost P700,000 with an accumulated depreciation of P400,000. The equipment was traded in for a new machine from a dealer company that had a list price of P800,000; however, the new machine could be purchased without trade in for P780,000 cash. Charles Company paid P500,000 cash in the exchange. Determine the following: (1) Initial cost of the newly acquired equipment (2) Gain or loss on exchange a. (1) 800,000; (2) 20,000 gain b. (1) 780,000; (2) 20,000 loss c. (1) 780,000; (2) 0 d. (1) 800,000; (2) 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
20.Charles Company has some old equipment that cost P700,000 with an accumulated depreciation of P400,000. The equipment was traded in for a new machine from a dealer company that had a list price of P800,000; however, the new machine could be purchased without trade in for P780,000 cash. Charles Company paid P500,000 cash in the exchange.
Determine the following:
(1) Initial cost of the newly acquired equipment
(2) Gain or loss on exchange
Determine the following:
(1) Initial cost of the newly acquired equipment
(2) Gain or loss on exchange
a. (1) 800,000; (2) 20,000 gain
b. (1) 780,000; (2) 20,000 loss
c. (1) 780,000; (2) 0
d. (1) 800,000; (2) 0
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education