8. Pensacola Inc, exchanged old equipment for new equipment in two exchange transactions Each transaction has commercial substance. Old Equipment Book Value Fair Value $74,000 $80,700 $61,400 $56,000 Cash Received S12,400 $10,900 Equipment A Equipment B For Equipment B, Pensacola would record a gain/(loss) of: A B. C. D. $3,900. (5.400) S(6,400). None of these answer choices are correct. 9. Data below for the year ended December 31, 2018, relates to Houdini Inc. Houdini started business January 1, 2018, and uses the LIFO retail method to estimate ending inventory. Beginning inventory Net purchases Net markups Net markdowns Net sales Cost Retail $ 88,000 S121.000 408,690 500.000 37.000 57.000 528.000 Estimated ending inventory at cost is: A. B. C D. S111,988 $118,114. S123.190. None of these answer choices are correct. Page 6 of 13 10. On January 1, 2018, the National Furniture Company adopted the dollar value LIFO method of computing inventory. An internal cost index is used to convertending inventory to base year. Inventory on January I was $216,000 Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Cost Index Relative to Base Year) Year Ended December 31 2018 2019 2020 Inventory at Year-end Costs $293.760 350,560 354,200 1.12 1.15 What was DVL inventory on December 31, 2019? $276,480 $322.400 $316,800 None of these answer choices are correct. D. 11. Julia Corporation acquired equipment from the manufacturer on 6/30/2018 and gave a noninterest-bearing note in exchange. Julia Co. is obligated to pay $550,000 on 4/30/2019 to satisfy the obligation in full. If Julia accrued interest of $15,000 on the note in its 2018 year-end financial statements, what amount would it record the equipment on its 6/30/2018 balance sheet? $$15,000. $525.000 $500,000 $550,000. Page 7 of 13