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 has commercial substance, ABC would capitalize the new equipment at: 300,000 1,175,000 2,575,000 3,500,000

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 has commercial substance, ABC would capitalize the new equipment at: 300,000 1,175,000 2,575,000 3,500,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 44P

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