CMA adapted) 5 P10-8B (Nonmonetary Exchanges) Heat Corporation wishes to exchange a machine used in its opera- tions. Heat has received the following offers from other companies in the industry. 1. James Company offered to exchange a similar machine plus $35,000. (The exchange has commercial substance for both parties.) 2. Wade Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. Labor Company offered to exchange a similar machine, but wanted $11,000 in addition to Heat's machine. (The exchange has commercial substance for both parties.) In addition, Heat contacted Jackson Corporation, a dealer in machines. To obtain a new machine, Heat must pay $50,000 in addition to trading in its old machine. Heat James Wade Labor Jackson Machine cost $200,000 $160,000 $132,000 $240,000 $100,000 Accumulated depreciation 75,000 80,000 46,000 140,000 -0- Fair value 110,000 75,000 110,000 121,000 160,000