air 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, DEF would recognize gain (loss) on exchange of:   900,000 (900,000)

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 37CE
icon
Related questions
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 has commercial substance, DEF would recognize gain (loss) on exchange of:

 

900,000

(900,000)

200,000

(200,000)

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Foreign Earned Income
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage