Client B Lacks Commercial Substance

Send to Gradebook Question 1 View Policies Current Attempt in Progress You have two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance, to allow them to record gains. Here are the facts: Original cost Accumulated depreciation Fair value Cash received (paid) Client A $106,800 38,300 95,000 (26,500) Client B $153,500 79,900 121,500 26,500 Record the entry on Client B's books assuming the exchange lacks commercial substance. (Round intermediate calculations to 5 decimal 1.25124 and final answer to O decimal places e.g. 58,971. If no entry is required, select "No Entry for the account titles and enter for the amo account titles are automatically indented when amount is entered. Do not indent manually Account Titles and Explanation Debit Credit Machinery 57547 Cash 26500 Accumulated Depreciation Machinery 79900 Machinery 153500 Gain on Disposal of Machinery 10447