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What would be the cost of the new asset acquired

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Reference no: EM132996036

In June 2021, NCT Company acquired a machine in exchanged for a non-monetary asset with a cost of P1,200,000 and an accumulated depreciation of P600,000 and paid a cash difference of P160,000. The market value of the non-monetary asset was determined to be P650,000.

Problem 1: If the exchange ha commercial substance, what amount of gain is to be recognized?

Problem 2: If the exchange is lacking in commercial substance, what would be the cost of the new asset acquired?

Reference no: EM132996036

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