ABC Company exchanged equipment with DEF Corp. The following data were available: ABC's equipment had a carrying value of P3,500,000 and fair value of P1.875,000. DEF's equipment has a fair value of P1,000,000 and carrying value of P1,200,000. DEF paid P700,000 cash to ABC. If the exchange LACKS commercial substance, DEF would capitalize the new equipment at: 500,000 1,000,000 1,200,000 1,900,000
ABC Company exchanged equipment with DEF Corp. The following data were available: ABC's equipment had a carrying value of P3,500,000 and fair value of P1.875,000. DEF's equipment has a fair value of P1,000,000 and carrying value of P1,200,000. DEF paid P700,000 cash to ABC. If the exchange LACKS commercial substance, DEF would capitalize the new equipment at: 500,000 1,000,000 1,200,000 1,900,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ABC Company exchanged equipment with DEF Corp. The following data were available:
ABC's equipment had a carrying value of P3,500,000 and fair value of P1.875,000.
DEF's equipment has a fair value of P1,000,000 and carrying value of P1,200,000.
DEF paid P700,000 cash to ABC.
If the exchange LACKS commercial substance, DEF would capitalize the new equipment at:
500,000
1,000,000
1,200,000
1,900,000
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