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Burrows Business Inc. exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is not expected to cause

Burrows Business Inc. exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is not expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will

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effectively reduce the amount to be recorded as the cost of the new asset.

be credited directly to the owner's capital account.

be reported in the Other Revenues and Gains section of the income statement.

effectively increase the amount to be recorded as the cost of the new asset.

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