Refer to the situation described in BE 10–15. Answer the questions assuming that the exchange lacks commercial substance.

Data from in BE 10-15

Refer to the situation described in BE 10–14. Answer the questions assuming that the fair value of the equipment  was $24,000, instead of $17,000.

Data from in BE 10-14

Calaveras Tire exchanged equipment for two pickup trucks. The book value and fair value of the equipment given  up were $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17,000, respectively.  Assume Calaveras paid $8,000 in cash and the exchange has commercial substance. (1) At what amount will Calaveras value the pickup trucks? (2) How much gain or loss will the company recognize on the exchange?