A company exchanged its used machine for a new machine in a transaction that had commercial substance. The old machine cost $68,000, and the new one had a cash price of $95,000. The company had taken $59,000 depreciation on the old machine and was allowed a $2,500 trade-in allowance and the balance of $92,500 was paid in cash. What gain or loss should be recorded on the exchange?
What will be an ideal response?
| Market value of machine | $95,000 |
| Book value of old machine ($68,000 ? $59,000) | $9,000 |
| Cash | 92,500 | 101,500 |
| Loss | $ 6,500 |
You might also like to view...
The diversity of cultures around the world is reflected in languages and communication
When KFC translated its slogan "Finger Licking Good" it became "Eat your fingers" in Chinese; similarly "Pepsi is for Generations" became "your grandparents will come out of the grave to drink Pepsi." Studies showing how linguists have divided the study of spoken or verbal language demonstrate how verbal and non-verbal communication can have an impact on marketing around the world.
Internships are ______ formal and ______ rigorous than apprenticeships.
a. more; more b. less; less c. less; just as d. just as; less
Which of the following describes a serial bond?
A) a bond that matures in installments at regular intervals B) a bond that gives the bondholder a claim for specific assets C) a bond that matures at one specified time D) a bond that is not backed by specific assets
What opportunity does the use of social media offer an organization?
A) The amplification of a business mistake B) The ability to discuss comments from unhappy customers C) Less hiring costs D) The building of goodwill with customers E) Product branding