GHI Company purchased a Toyota Vios in January 2017 for P1,500,000. The history of the company shows that service vehicles have a useful life of seven years, after which, it is estimated to have a value of P100,000. On September 29, 2021, the service vehicle was exchanged for a Mitsubishi Mirage with cost of P1,800,000 and carrying amount of P700,000, with GHI paying P45,000 to JKL Company. On the date of exchange, it was estimated that the Toyota and Mitsubishi models has a fair market value of P600,000 and P650,000, respectively. The transaction has commercial substance. Based on the above transaction, what gain or loss should GHI Company recognize?

Based on the above transaction, what gain or loss should GHI Company recognize?

a. 0

b. 145,000

c. 150,000

d. 195,000

And based on the above transaction, what gain or loss should JKL Company recognize?

a. 95.000

b. 405,000

c.455,000

d.495,000