A Machine That Was Purchased for $110,000 Has Accumulated Depreciation

question 98

Multiple Choice

A machine that was purchased for $110,000 has accumulated depreciation of $90,000.The business exchanges the machine for a new one.The new machine has a market value of $140,000,and the business pays $110,000 cash.Assume the exchange has commercial substance.This exchange results in a ________.

• A)gain of $10,000
• B)gain of $5,000
• C)loss of $10,000
• D)loss of $20,000

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