Sawyer Corporation has a machine (Machine A) that it acquired on 1/1/14 for $540,000. On 12/31/14 such machines have a selling price and fair value of $621,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.

Brown Corporation has a machine (Machine B) that it acquired on 1/1/14 for $729,000. On 12/31/14 such machines have a selling price and fair value of $540,000. When used in production, such machines have an estimated useful life of 10 years with no salvage value. Use the straight-line method.

On 12/31/14 Brown gave Machine B plus $81,000 cash to Sawyer in return for Machine A.

55.__ Given the assumption in above, at what amount will Sawyer record Machine B?

a.$557,609.

b.$405,000.NO IDEA

c.$503,604.

d.$422,609.

I have no idea how to determine this answer.

It seems there is a loss but none of my calculations are equal to any of these answers. I have to be missing something.

If is it a gain, I am lost as well.