A Machine That Was Purchased for $100,000 Has an Accumulated

question 60

Multiple Choice

A machine that was purchased for $100,000 has an accumulated depreciation of $70,000 as of the current date.The corporation exchanges the machine for a new machine.The new machine has a market value of $120,000 and the corporation pays cash of $100,000.Assume the exchange has commercial substance.What is the result of this exchange?

• A)gain of $10,000
• B)gain of $5,000
• C)loss of $10,000
• D)loss of $30,000

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Definitions:

Canada Revenue

Denotes the federal agency responsible for the collection of taxes and the administration of tax laws and policies in Canada.

Probability

Evaluating the likelihood of an event's occurrence.

Birthday

The anniversary of the day on which a person was born, typically celebrated as an annual event.

Probability

A measure quantifying the likelihood that an event will occur, expressed as a number between 0 and 1.