1.Equipment that cost $674000 and has accumulated depreciation of $292000 is exchanged for equipment with a fair value of $480000 and $120000 cash is received. The exchange lacked commercial substance. The gain to be recognized from the exchange is

a.$188000

b.$52400

c.$90000

d.$278000

2. Crane Company has equipment with a carrying amount of $2400000. The expected future net cash flows from the equipment are $2440000, and its fair value is $2035000. The equipment is expected to be used in operations in the future. What amount (if any) should Crane report as an impairment to its equipment?

a

$365000.

b

$40000.

c

$405000.

d	No impairment should be reported

3. A schedule of machinery owned by Concord Corporation is presented below:

			Estimated		Estimated
	Total Cost		Salvage Value		Life in Years
Machine X	$591000		$38000		14
Machine Y	805000		82000		10
Machine Z	292000		58000		6

Concord computes depreciation by the composite method. The composite rate of depreciation (in percent) for these assets is

a

8.36.

b

8.93.

c

13.79.

d

10.36.