On the First Day of the Fiscal Year, a New

question 146

Essay

On the first day of the fiscal year, a new walk-in cooler with a list price of $58,000 was acquired in exchange for an old cooler and $44,000 cash. The old cooler had a cost of $25,000 and accumulated depreciation of $16,000.
Assume the transaction has commercial substance. (a) Determine the gain to be recorded on the exchange.
(b) Journalize the entry to record the exchange.

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Definitions:

Brainstem

The oldest part and central core of the brain, beginning where the spinal cord swells as it enters the skull; the brainstem is responsible for automatic survival functions.

Medulla

The base of the brainstem; controls heartbeat and breathing.

Visual Cortex

The part of the cerebral cortex involved in processing visual information, located in the occipital lobe of the brain.

Thalamus

The brain’s sensory switchboard, located on top of the brainstem; it directs messages to the sensory receiving areas in the cortex and transmits replies to the cerebellum and medulla.