A machine costing P120,000, with accumulated depreciation of P95,000, with a fair market value of P27,500, was exchanged for a new machine with a fair value of P135,000 and the proper amount of cash is paid. The exchange has commercial substance. The gain/loss to be recorded on the exchange is

A machine costing P120,000, with accumulated depreciation of P95,000, with a fair market value of P27,500, was exchanged for a new machine with a fair value of P135,000 and the proper amount of cash is paid. The exchange has commercial substance. The gain/loss to be recorded on the exchange is

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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Question

A machine costing P120,000, with
accumulated depreciation of P95,000, with
a fair market value of P27,500, was
exchanged for a new machine with a fair
value of P135,000 and the proper amount of
cash is paid. The exchange has commercial
substance. The gain/loss to be recorded on
the exchange is

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