Examlex

Solved

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?


Definitions:

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.

Related Questions