Equipment that cost €80,000 and has accumulated depreciation of €43,000 is exchanged for equipment with a fair value of €32,000 and €8,000 cash is received. Required (a) Prepare the entry for the exchange, assuming that the exchange has commercial substance. Show the calculation of the gain to be recognized from the exchange, if any. (b) Prepare the entry for the exchange, assuming that the exchange lacks commercial substance. Show the calculation of the gain to be recognized from the exchange, if any.

Answer rating: 100% (QA)

1 Equipment cost 80000 Less Accumulated depreciation 47... View the full answer