Chapter 10, Problem 10.26EX

(a)

To determine

Exchange of fixed assets: It refers to the purchase of new fixed assets in exchange of old fixed assets. Fixed Assets refer to the long-term assets having a useful life of more than a year which is, acquired by a company to be used in its business activities, for generating revenue. Examples of fixed assets are Plant, Property, Equipment, Land, and Buildings.

To determine: the amount of cash given.

(b)

To determine

the gain or (loss) on the exchange of equipment.