[Use information below to answer the next 2 questions]

Company B purchase a new equipment at a price of $16,200 plus trade-in, f.o.b. factory. The company paid $15,200 cash and traded in a used equipment, which had originally cost $70,400. The used equipment had a book value of $32,000 and a secondhand market value of $37,000. Freight and installation charges for the new equipment is $2,500.

At what value should the new equipment be reported on balance sheet?

A. 52,700

B. 53,700

C. 54,700

D. 55,700

Use information above, calculate the amount of gain recorded?

• A. $5,000
• B. $5,500
• C. $6,000
• D. $6,500