In October 2014,Pollock Company Exchanged a Used Packaging Machine Having

question 44

Multiple Choice

In October 2014,Pollock Company exchanged a used packaging machine having a book value of $240,000 for a new machine and paid a cash difference of $30,000.The market value of the used packaging machine was determined to be $280,000.The exchange had commercial substance.In its income statement for the year ended December 31,2014,how much gain should Pollock recognize on this exchange?

• A) $0
• B) $10,000
• C) $30,000
• D) $40,000

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Definitions:

Adenine

A purine base found in DNA and RNA, which pairs with thymine in DNA and with uracil in RNA during the formation of nucleic acids.

Nucleotide

A basic building block of DNA and RNA, consisting of a sugar, a phosphate group, and a nitrogenous base.

Nitrogen Base

A component of nucleotides in DNA and RNA, which includes adenine, thymine (in DNA), uracil (in RNA), guanine, and cytosine.

Uracil

A nitrogen-containing base found in RNA, where it pairs with adenine and replaces thymine during DNA transcription.