Vice Corporation is considering replacing a machine that it uses in its operations. Companies that wereinterested in working with Vice made the following offers:a. Tito Co. offered a similar machine in exchange for P350,000 in cash.b. Vic Corp. offered to exchange a machine that was identical.c. Joey Inc. offered to trade a similar machine in exchange for Vice's machine, but they demandedP120,000 in addition to Vice's.Presented below are the machine's cost, accumulated depreciation, and fair value:ViceTitoVicJoeyWillieCostAccumulated Depreciation2,500,000.00 1,900,000.00 2,305,000.00 2,300,000.00 1,850,000.00750,000.00 675,000.00 1,065,000.00 1,125,000.001,380,000.00 1,035,000.00 1,380,000.00 1,500,000.00 2 775,000.00Fair valueIn addition, Vice contacted Willie Co., a machine dealer. Vice will pay P1,395,000 in cash plus the value ofits old computer in exchange for a new one.As a result of the transaction with Willie, what is theeffect (net of any contra asset) on the Noncurrentasset section of Vice' records?a. P1,750,000b. P1,705,000c. P1,025,000d. P1,205,000

Answer (c) P 1,025,000 A machine is purchased by Vice Co from Willie Co. by the following terms:-…

Vice Corporation is considering replacing a machine that it uses in its operations. Companies that were interested in working with Vice made the following offers: a. Tito Co. offered a similar machine in exchange for P350,000 in cash. b. Vic Corp. offered to exchange a machine that was identical. c. Joey Inc. offered to trade a similar machine in exchange for Vice's machine, but they demanded P120,000 in addition to Vice's. Presented below are the machine's cost, accumulated depreciation, and fair value: Vice Tito Vic Joey Willie Cost 2,500,000.00 1,900,000.00 2,305,000.00 2,300,000.00 1,850,000.00 675,000.00 1,065,000.00 1,125,000.00 Accumulated Depreciation 750,000.00 1,380,000.00 1,035,000.00 1,380,000.00 1,500,000.00 2775,000.00 Fair value In addition, Vice contacted Willie Co., a machine dealer. Vice will pay P1,395,000 in cash plus the value of its old computer in exchange for a new one. As a result of the transaction with Willie, what is the effect (net of any contra asset) on the Noncurrent asset section of Vice' records? a. P1,750,000 b. P1,705,000 c. P1,025,000 d. P1,205,000

Vice Corporation is considering replacing a machine that it uses in its operations. Companies that were interested in working with Vice made the following offers: a. Tito Co. offered a similar machine in exchange for P350,000 in cash. b. Vic Corp. offered to exchange a machine that was identical. c. Joey Inc. offered to trade a similar machine in exchange for Vice's machine, but they demanded P120,000 in addition to Vice's. Presented below are the machine's cost, accumulated depreciation, and fair value: Vice Tito Vic Joey Willie Cost 2,500,000.00 1,900,000.00 2,305,000.00 2,300,000.00 1,850,000.00 675,000.00 1,065,000.00 1,125,000.00 Accumulated Depreciation 750,000.00 1,380,000.00 1,035,000.00 1,380,000.00 1,500,000.00 2775,000.00 Fair value In addition, Vice contacted Willie Co., a machine dealer. Vice will pay P1,395,000 in cash plus the value of its old computer in exchange for a new one. As a result of the transaction with Willie, what is the effect (net of any contra asset) on the Noncurrent asset section of Vice' records? a. P1,750,000 b. P1,705,000 c. P1,025,000 d. P1,205,000

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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