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Equipment that cost $380,000and has accumulated depreciation of $310,000is exchanged for equipment with a fair value of $160,000and $40,000cash is received. The exchange lacked commercial

Equipment that cost $380,000and has accumulated depreciation of $310,000is exchanged for equipment with a fair value of $160,000and $40,000cash is received. The exchange lacked commercial substance.

a)Calculate the gain to be recognized from the exchange.

b)Prepare the entry for the exchange. Show a check of the amount recorded for the new equipment.

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