(Answered) Equipment that cost 80000 and has accumulated depreciation

Finance

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.

Instructions

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

(b) Prepare the entry for the exchange. Show a check of the amount recorded for the new equipment.

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