Hunter Sailing Company Exchanged an Old Sailboat for a New

question 82

Multiple Choice

Hunter Sailing Company exchanged an old sailboat for a new one.The old sailboat had a cost of $160,000 and accumulated depreciation of $100,000.The new sailboat had an invoice price of $270,000.Hunter received a trade in allowance of $70,000 on the old sailboat,which meant the company paid $200,000 in addition to the old sailboat to acquire the new sailboat.If this transaction has commercial substance,what amount of gain or loss should be recorded on this exchange?

• A)$0 gain or loss.
• B)$10,000 gain.
• C)$10,000 loss.
• D)$60,000 loss.
• E)$70,000 loss.