alo-halo Company has outstanding P950,000 note payable to Ube Finance Corporation. Because of financial difficulties, Halo-halo Company negotiates with Ube Finance to exchange inventory of machine parts to satisfy the debt. The cost of the machine parts inventory transferred is carried in Halo-halo Company’s books at P835,000. The estimated sales price of these inventory items is P610,000. The gain on debt restructuring is A. 0 B. 115,000 C. 225,000 D. 340,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Halo-halo Company has outstanding P950,000 note payable to Ube Finance Corporation. Because of financial difficulties, Halo-halo Company negotiates with Ube Finance to exchange inventory of machine parts to satisfy the debt. The cost of the machine parts inventory transferred is carried in Halo-halo Company’s books at P835,000. The estimated sales price of these inventory items is P610,000. The gain on debt restructuring is

A. 0

B. 115,000

C. 225,000

D. 340,000

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education