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equipment that cost $400,000 and has accumulated depreciation of $315,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received.
equipment that cost $400,000 and has accumulated depreciation of $315,000 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received. the exchanged lacked commercial substance.
instructions
(a)show the calculation of 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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