This topic is about Property, Plant, and Equipment Based on the problem,What is the cost of the machine acquired in the exchange? How much is the gain on the exchange? During the year, May P. Rah Co. exchanged an old packing machine, whichcost Php1,200,000 and was 50% depreciated, for another used machineand paid a cash difference of Php160,000The fair value of the old packing machine was determined to be Php700,000

In case of exchange of one asset with another asset, fair value of the asset is consideted for…

Answered: This topic is about Property, Plant,…

This topic is about Property, Plant, and Equipment Based on the problem, What is the cost of the machine acquired in the exchange? How much is the gain on the exchange?

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

This topic is about Property, Plant, and Equipment

Based on the problem,

What is the cost of the machine acquired in the exchange?
How much is the gain on the exchange?

During the year, May P. Rah Co. exchanged an old packing machine, which
cost Php1,200,000 and was 50% depreciated, for another used machine
and paid a cash difference of Php160,000
The fair value of the old packing machine was determined to be Php700,000

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