A machine cost €120,000, has annual depreciation of €20,000, and has accumulated depreciation of €90,000 on December 31, 2022. On April 1, 2022, when the machine has a fair value of €27,500, it is exchanged for a machine with a fair value of €135,000 and the proper amount of cash is paid. The exchange has commercial substance. The gain to be recorded on the exchange is O a. €5,000. O b. €2,500. O c. €15,000. O d. €0.

A machine cost €120,000, has annual depreciation of €20,000, and has accumulated depreciation of €90,000 on December 31, 2022. On April 1, 2022, when the machine has a fair value of €27,500, it is exchanged for a machine with a fair value of €135,000 and the proper amount of cash is paid. The exchange has commercial substance. The gain to be recorded on the exchange is O a. €5,000. O b. €2,500. O c. €15,000. O d. €0.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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