A Company Exchanged Its Used Machine for a New Machine

question 42

Essay

A company exchanged its used machine for a new machine in a transaction that had commercial substance. The old machine cost $70,000, and the new one had a cash price of $95,000. The company had taken $60,000 depreciation on the old machine and was allowed a $2,500 trade-in allowance and the balance of $92,500 was paid in cash. What gain or loss should be recorded on the exchange?

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Definitions:

Urgent Text Message

A text message that requires immediate attention or conveys an urgent matter.

Business Attire

Clothing that is suitable for a professional work environment, often including suits and dress shoes.

Perfume

A fragrant liquid typically made from essential oils extracted from flowers and spices, used to impart a pleasant smell to one's body or clothes.

Continuing Education

Ongoing, formal learning activities designed to develop new skills or knowledge, often required in various professions for maintaining licensure or certification.