Problem 9 M Company purchased an electric saw on April 30, 2020, by trading in its old mechanical model and paying the balance in cash. The following data relate to the purchase. List price of the new electric saw P 15,800 Cash paid 10,000 Cost of the old mechanical saw (5-year life, P 700 residual value) 12,700 Accumulated depreciation (old mechanical saw - straight line) 7,200 Fair value of old mechanical saw 5,200 Requirements: Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. M Company's year ends December 31 and depreciation has been recorded through December 31, 2019. Problem 10 A Spa's adding machine was broken by a newly hired accountant on his first day of work. A Spa gave the machine plus Php640 to Z Business Machine (dealer) in exchange for a new machine. Assume the following information about the machines. A Spa Z Business (Old Machine) Machine (New Machine) Machine cost P 580 P 540 Accumulated Depreciation 280 0 Fair value 170 810 Prepare entries in the books of A Spa and Z Business recording the exchange. Succeeding problems were submitted by students of BA 1 14.1 15 Semester AY 2018-2019 (THWXI): Problem 11 On January 1, 2018, Company A paid P 700,000 and exchanged an equipment which has a carrying amount P 2,000,000 and a fair value of P 2,100,000 for another equipment with a fair value of P 2,500,000. After the trade, Company A determined that the cash flows changed significantly due to the exchange. What is the value of the new equipment and the gain or loss to be recognized? Prepare the journal entry to record this transaction in the books of Company A. Problem 12 Myka Motor Sales exchanged a car from its inventory for a computer to be used as a long-term asset. The following information relates this exchange: Carrying amount of the car P 600,000 List selling price of the car 900,000 Fair value of the computer 860,000 Cash difference paid by Myka 100,000