Equipment was acquired for $210,000 and has accumulated depreciation of $87,000. The business exchanges this equipment for new equipment. The new equipment has a market value of $303,000 and the business pays $58,000 cash. Assume the exchange has commercial substance. The exchange results in ________.
A) loss $122,000
B) gain $180,000
C) gain $122,000
D) loss $180,000
C) gain $122,000
Explanation:
Market value of assets received: $303,000
Less:
Book value of asset exchanged $123,000
Cash paid 58,000 181,000
Gain $122,000
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