On December 31, 2021, ABC Inc. exchanged its used production equipment for a new model of production equipment with XYZ Inc. We know the following information about the transaction. The transaction has commercial substance. ABC purchased the used production equipment 3 years ago at the cost of 80,000. ABC uses the straight-line depreciation method to depreciate the used production equipment. The residual value of the equipment is 10,000. The estimated useful life of the equipment is 7 years. The fair value of the new model production equipment is 100,000. Along with the used production equipment, ABC Inc. paid 25,000 cash to XYZ Inc for the transaction.

Required: a. Whats the cost of ABC Inc.'s acquired new production equipment? (3 marks)

b. What is the accumulated depreciation account balance of the used production equipment before the transaction? (3 marks)

c. Calculate ABC's gain or loss from the disposal of the used production equipment. (3 marks)

d. Write down ABC's journal entry for this transaction. (5 marks)

e. Assume that the transaction does not have commercial substance, write down ABS'sjournal entry for this transaction. (6 marks)