$6$:$53$

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PE$\_232\_$M$1$

$(2)$ Prepare the journal entry to record the exchange of the asset in Year $17$ for Bob the Builder, nsaction lacks commercial substance $($exception case$).[6$ marks$]$

$3$ of $3$

Q$5.$ This question will be covered in class.

Q$6.$ On April $1,$ Year $6,$ Bob the Builder traded in equipment with a book value of $$2,000($initial cost $$40,000)$ and paid $$50,500$ in cash. The old equipment could have been sold for $$8,000$ at the date of the trade$-$in but was accepted for a trade$-$in allowance of $$9,500$ on the new equipment. He estimates that the new equipment will have a useful life of $5$ years and a residual value of $$4,500.$ On September $1,$ Year $8,$ Bob sells this equipment for $$35,000.$ Assuming that straight$-$line depreciation is recognized once at the end of the fiscal year $($December $31)$ and Bob adopts the half$-$year convention, calculate the gain or loss on the sale of the equipment on September $1,$ Year $8.[6$ marks$]$

Q$7.$ The information below relates to equipment owned by Bob the Builder as of December $31,$ Year $7$:

$\backslash$table$[[$Cost$,$$$10,000,000$