Question: QUESTION 1 Wallie Co. trades a used machine for a new machine. This exchange is determined to have commercial substance. The used machine had an

QUESTION 1

Wallie Co. trades a used machine for a new machine. This exchange is determined to have commercial substance. The used machine had an original cost of $8,000 and accumulated depreciation of $2,000 and a fair value of $4,000. The new machine has a list price of $15,000. In the trade, it is decided that the used machine has a trade value of 3,000. Calculate the loss on disposal of the used machine.

QUESTION 2

Wallie Co. trades a used machine for a new machine. This exchange is determined to have commercial substance. The used machine had an original cost of $8,000 and accumulated depreciation of $2,000 and a fair value of $4,000. The new machine has a list price of $15,000. In the trade, it is decided that the used machine has a trade value of $3,000. Calculate the amount that will be recorded on the books for the new machine.

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