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What the gain recognized in relation to the exchange

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Henry Company acquires equipment (EQ. 14) in exchange for equipment (EQ. 9) plus cash of P160,000. The carrying and fair value of EQ14 and EQ9 at the date of the exchange are as follows:

                                                       EQ 14               EQ 9

Equipment                            P500,000                P320,000

Accumulated depreciation         175,000                 180,000

Fair value of equipment                 335,000               185,000

The configuration (risk, timing and amount) of the cash flows are determined to be significantly different.

Problem a. The initial cost of the new equipment is?

Problem b. The gain (loss) recognized in relation to the exchange is?

Reference no: EM132781349

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