Examlex

Solved

A Company Exchanged Its Used Machine for a New Machine

question 62

Essay

A company exchanged its used machine for a new machine in a transaction that had commercial substance.The old machine cost $68,000,and the new one had a cash price of $95,000.The company had taken $59,000 depreciation on the old machine and was allowed a $2,500 trade-in allowance and the balance of $92,500 was paid in cash.What gain or loss should be recorded on the exchange?


Definitions:

Tour Company

A business that specializes in organizing travel tours and excursions, often providing guides, transportation, and itinerary planning services.

Gregarious Guy

A person who is very sociable, enjoys being in crowds, and often engages in social activities.

Idle Production Capacity

Occurs when the service provider is available but there is no demand for the service.

Demand Exceeds

A situation where the demand for a product or service surpasses its supply, often leading to stock shortages or increased prices.

Related Questions