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On July 1, 2021, PAOLO exchanged its non-monetary asset (equipment) with YEN’s non-monetary asset (machinery). The following data were made available:   PAOLO: Equipment                                           P4,400,000 Accumulated depreciation                  2,000,000 Fair value of the Equipment                  3,000,000   YEN: Machinery                                           P3,700,000 Accumulated depreciation                  1,800,000 Fair value of the machinery                   2,100,000   The exchange has significantly changed the cash flows of each entity.

On July 1, 2021, PAOLO exchanged its non-monetary asset (equipment) with YEN’s non-monetary asset (machinery). The following data were made available:   PAOLO: Equipment                                           P4,400,000 Accumulated depreciation                  2,000,000 Fair value of the Equipment                  3,000,000   YEN: Machinery                                           P3,700,000 Accumulated depreciation                  1,800,000 Fair value of the machinery                   2,100,000   The exchange has significantly changed the cash flows of each entity.

FINANCIAL ACCOUNTING
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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On July 1, 2021, PAOLO exchanged its non-monetary asset (equipment) with YEN’s non-monetary asset (machinery). The following data were made available:

 

PAOLO:

Equipment                                           P4,400,000

Accumulated depreciation                  2,000,000

Fair value of the Equipment                  3,000,000

 

YEN:

Machinery                                           P3,700,000

Accumulated depreciation                  1,800,000

Fair value of the machinery                   2,100,000

 

The exchange has significantly changed the cash flows of each entity.

 

How much is cost of the new asset of PAOLO?

 
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