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At the beginning of the current year, Junk Company traded in an old machine having a carrying amount of P1,680,000 and paid a cash difference of P600,000 for a new machine with a cash price of P2,050,000. 1. What is the cost of the machine acquired in exchange? a. 1,680,000 b. 2,050,000 c. 1,450,000 d. 1,080,000 2. What amount of loss should be recognized on the exchange? a. 600,000 b. 230,000 c. 370,000 d.

At the beginning of the current year, Junk Company traded in an old machine having a carrying amount of P1,680,000 and paid a cash difference of P600,000 for a new machine with a cash price of P2,050,000. 1. What is the cost of the machine acquired in exchange? a. 1,680,000 b. 2,050,000 c. 1,450,000 d. 1,080,000 2. What amount of loss should be recognized on the exchange? a. 600,000 b. 230,000 c. 370,000 d.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 23-19 (AICPA Adapted) At the beginning of the current year, Junk Company traded in an old machine having a carrying amount of P1,680,000 and paid a cash difference of P600,000 for a new machine with a cash price of P2,050,000. 1. What is the cost of the machine acquired in exchange? a. 1,680,000 b. 2,050,000 с. 1,450,000 d. 1,080,000 2. What amount of loss should be recognized on the exchange? a. 600,000 b. 230,000 с. 370,000 d. 660
Transcribed Image Text:Problem 23-19 (AICPA Adapted) At the beginning of the current year, Junk Company traded in an old machine having a carrying amount of P1,680,000 and paid a cash difference of P600,000 for a new machine with a cash price of P2,050,000. 1. What is the cost of the machine acquired in exchange? a. 1,680,000 b. 2,050,000 с. 1,450,000 d. 1,080,000 2. What amount of loss should be recognized on the exchange? a. 600,000 b. 230,000 с. 370,000 d. 660
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