Scafell Die Cutting Company owns a machine that originally cost $70,000 and currently has accumulated depreciation of $52,000. The company trades in the machine to a dealer on a new model, which has a selling price (market value of) $90,000. The old machine has a market value of $15,000, so Scafell pays $75,000 in the exchange.

Required: (1) What is the amount at which Scafell records the new machine?

(2) What is the gain or loss that Scafell records on the trade-in of the old machine?

(3) How would your answer to (2) change if Scafell pays only $70,000 in the exchange?

 lop1