Equipment that originally cost $220,000 with accumulated depreciation of $100,000 to the date of exchange is traded (exchanged) for equipment with a fair value of $160,000. To even the exchange, $40,000 cash is received. The exchange lacks commercial substance.

___ 3.	The gain to be recognized from the exchange is
	A)	$16,000
	B)	$20,000
	C)	$60,000
	D)	$80,000
	E)	Some other amount than those shown above.

___ 4.	The new equipment should be recorded on the company's books at
	A)	$160,000.
	B)	$120,000.
	C)	$100,000.
	D)	$96,000.
	E)	Some other amount than those show above.