Hartney Company and Indoy Company had an exchange of productive assets. Hartney Company exchanges a building for Indoy's equipment. The following information are as follows:   Hartney (Machine) Indoy (Equipment) Cost of asset exchanged P900,000 P800,000 Accumulated depreciation   540,000   320,000 Fair value of asset exchanged   400,000   350,000 Cash received (paid)     50,000   (50,000) Assuming that the transaction has a commercial substance, how much should Indoy recognize gain/loss in the exchange

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%

Hartney Company and Indoy Company had an exchange of productive assets. Hartney Company exchanges a building for Indoy's equipment. The following information are as follows:

  Hartney (Machine) Indoy (Equipment)
Cost of asset exchanged P900,000 P800,000
Accumulated depreciation   540,000   320,000
Fair value of asset exchanged   400,000   350,000
Cash received (paid)     50,000   (50,000)

Assuming that the transaction has a commercial substance, how much should Indoy recognize gain/loss in the exchange? (Note: Indicate "(  )" if loss)

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Property, Plant and Equipment
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education