QUESTION 1 A printer that cost $600 and has been owned for 2 years is traded in for a new one. Depreciation in the amount of S120 had been taken each year. The new printer has a fair market value of $1,250. A trade-in allowance of $400 is granted, and the balance is paid in cash. The transaction to enter the exchanges of these two assets would result in the recognition of a. a gain of $200 b. neither a gain nor a loss. c. a loss of $40. d. a gain of $40