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Equipment that cost $80,000 and has accumulated depreciation of $63,000 is exchanged for similar equipment with a fair value of $35,000 and $15,000 cash is received. The exchange lacked commercial substance.

Directions: Respond to these questions on a separate Excel spreadsheet as directed on the Problem Set 3 directions.

a) Show the calculation of the gain to be recognized from the exchange.

b) Prepare the entry for the exchange.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9277270

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