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What was the amount recorded by Mawnteyn

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Question - On July 1, 2021, Bulkeyno Inc. exchanged machine with Mawnteyn Company. Bulkeyno's cost to the machine was P576,000 with related accumulated depreciation of P270,000. Its fair market value was P54,000 higher than its book value.

Mawnteyn, on the other hand purchased the machine for P660,000. Carrying value as of the date of exchange was P348,000. Bulkeyno paid Mawnteyn P90,000 for the difference in fair values of the two machines.

1. If the transaction had commercial substance, what was the amount to be recorded by Bulkeyno as the cost of the asset acquired through exchange?

A. 450,000 C. 306,000

B. 396,000 D. 258,000

2. If the transaction was one without commercial substance, what was the amount recorded by Mawnteyn as the cost of the asset acquired through exchange?

A. 450,000

B. 396,000

C. 306,000

D. 258,000

Reference no: EM132972463

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