You have been posted to a company's accounting department to help them improve business processes. Please use your professional knowledge to assist them in the following issues based on the information below. 1. Please use conventional retail inventory method to confirm the ending inventory at Dec. 31, 2020. < 2. Beginning Inventory Purchases Purchase returns Gross sales Items Sales returns Mark-ups Mark-up cancellations Markdowns Markdown cancellations < Fright-in cost Loss from breakage normal Cost $375,000 1,369,000 90.000 Retail $ 600,000 2,000,000 120,000+ 2,110,000+ 145,000 180,000 60,000 65,000 30,000 63,000 8000 On January 1, 2020, EA Co. bought a new machine. The total original cost of the machine is $255,000. On December 31, 2020, EA Co. wants to disposal the old machine. This old machine had an estimated life of 5 years (straight-line depreciation) and a salvage value of $15,000. The old machine is exchanged for a new machine with a fair value of $142,000. The exchange lacked commercial substance. EA Co. also have to pay $18,000 cash. Please show the gain recognition process from the exchange and prepare the entry for the exchange.