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- 2. Nonmonetary exchange. Mask Makers Inc. had a sheet metal cutter that cost $240,000 on January 5, 2016. This old cutter had an estimated life of ten years and a salvage value of $40,000. On January 1, 2021, the old cutter is exchanged for a new cutter with a fair value of $120,000. The exchange lacked commercial substance. Mask Makers Inc also received $30,000 cash. Assume that the last fiscal period ended on December 31, 2020, and that straight-line depreciation is used (Hint: calculate Accumulated Depreciation, in the tutorial problems it was given to you) (a) Show the calculation of the amount of the gain or loss to be recognized by Mask Makers Inc. (b) Prepare all entries that are necessary on January 1, 2021. Show a check of the amount recorded for the new cutter