Question

Equipment was acquired for $ 201 comma 000and has accumulated depreciation of $ 95 comma 000.The business exchanges this equipment for new equipment. The new equipment has a market value of $ 309 comma 000and the business pays $ 53 comma 000cash. Assume the exchange has commercial substance. The exchange results in​ ________.

Answer 1

Answer:

$150,000

Explanation:

The computation of exchange results is shown below:-

Before that we need to do the following calculations

Equipment value after depreciation = Equipment amount - Depreciation

= $201,000 - $95,000

= $106,000

New equipment value = Market value - Paid amount

= $309,000 - $53,000

= $256,000

Gain =  New equipment value - Equipment value after depreciation

= $256,000 - $106,000

= $150,000

We simply applied the above formulas