Use the following information to answer the next 3 questions:

Desert, Co. is trading a machine which has an original cost of $60,000 and accumulated depreciation of $35,000, for another fixed asset. For each of the following independent scenarios, determine the amount to be capitalized for the new fixed asset that Desert is acquiring (i.e. the original cost Desert will report on their balance sheet for the new asset) and the gain or loss to be recognized at the time of the exchange.

*If there is a gain record your answer as a positive number; if there is a loss, record your answer in parenthesis ().If there is NO gain or loss, type in NE.Round all answers to the nearest whole dollar.

Scenario 1:

Desert received in this exchange a machine with a fair value of $18,000 and also received $10,000 cash. The exchangelackscommercial substance.

A.)What is the Original Cost of the NEW Asset reported on Desert's Balance Sheet?

B.)What is the amount of the gain or loss (if any) Desert will recognize as a result of this transaction?

Scenario 2:

Desert paid $8,000 and traded the old asset to receive a machine with fair value of $40,000. The transactionlackscommercial substance.

A.) What is the Original Cost of the NEW Asset reported on Desert's Balance Sheet?

B.)What is the amount of the gain or loss (if any) Desert will recognize as a result of this transaction?

Scenario 3:

Desert paid $5,100 and exchanged the old asset. The fair value of the new asset received was $28,000. The exchangehascommercial substance.

A.)What is the Original Cost of the NEW Asset reported on Desert's Balance Sheet?

B.)What is the amount of the gain or loss (if any) Desert will recognize as a result of this transaction?

Scenario 4:

Desert received a machine with fair market value of $25,000 and $5,000 cash. The transactionlackscommercial substance.

A.) What is the Original Cost of the NEW Asset reported on Desert's Balance Sheet?

B.)What is the amount of the gain or loss (if any) Desert will recognize as a result of this transaction?