Question 8

Oriole Company traded machinery with a book value of $917280 and a fair value of $882000. It received in exchange from Sandhill Co. a machine with a fair value of $996660. Oriole also paid cash of $99666 in the exchange. Sandhills machine has a book value of $917280. What amount of gain or loss should Oriole recognize on the exchange (assuming lack of commercial substance)?

$3528 loss

$35280 loss

$99666 gain

$ -0-