solved:GRAVITYCOMPANY andHYPECOMPANY agreed to exchange a set o

  

GRAVITYCOMPANY andHYPECOMPANY agreed to exchange a set of machinerywhereinGRAVITYCOMPANY wouldreceivefrom HYPECOMPANY P40,000. The cash configuration of the exchange was identified to be significantly different. The carrying values and fair values of the machineries are as follows: GRAVITYCOMPANY HYPECOMPANYCOST 600,000 450,000ACCUMULATED DEPRECIATION 400,000 300,000CARRYING AMOUNT 200,000 150,000FAIR VALUE 175,000 120,000CASH PAID 40,000CASH RECEIVED 40,000 Assuming that the fair value of GRAVITY COMPANY’s machine is more reliable than that of HYPE COMPANY:a.The initial measurement of the machinery in GRAVITY COMPANY’s books isb.The initial measurement of the machinery in HYPE COMPANY’S books isc.Gain/loss to be included in the P&L section by GRAVITY COMPANY in relation to the exchange isd.Gain/loss to be included in the P&L section by HYPE COMPANY in relation to the exchange isAccountingBusinessFinancial Accounting ACCOUNTING 225