Use the Following Information for Questions 108 and 109

question 151

Multiple Choice

Use the following information for questions 108 and 109.
A machine cost $600,000, has annual depreciation of $100,000, and has accumulated depreciation of $450,000 on December 31, 2014. On April 1, 2015, when the machine has a fair value of $137,500, it is exchanged for a machine with a fair value of $675,000 and the proper amount of cash is paid. The exchange had commercial substance.
-The gain to be recorded on the exchange is

• A) $0.
• B) $12,500
• C) $25,000
• D) $75,000

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Definitions:

Ciliary Action

The movement of cilia, small hair-like structures, which work to move particles or fluids over the surface of certain cells.

Corpus Luteum

A temporary endocrine structure in female ovaries that is involved in the production of progesterone and estrogen during the menstrual cycle and early pregnancy.

Gonadotropins

Hormones produced by the anterior pituitary gland that stimulate the activity of the gonads (ovaries and testes).

Lipotropins

Hormones produced by the anterior pituitary gland, involved in fat metabolism and the stimulation of lipolysis.