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Machinery that cost $600,000 and has accumulated depreciation of $475,000 is exchanged for machinery with a fair value of $240,000 and $60,000 cash is received.

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Machinery that cost $600,000 and has accumulated depreciation of $475,000 is exchanged for machinery with a fair value of $240,000 and $60,000 cash is received. The exchange lacked commercial substance. (20pts) #7 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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