Reba Company received $60,000 in cash and used equipment with a fair value of $160,000 from Fargo Corporation in exchange for Reba's existing equipment, which had a fair value of $210,000 and an undepreciated cost of $170,000 recorded on its books. The transaction was undertaken because Reba was revising its market strategy and planned to reduce the use of this type of equipment in its production. How much gain should Reba recognize on this exchange and at what value should the acquired equipment be recorded, respectively?

Gain – $10,000 and Equipment – $150,000

Gain – $10,000 and Equipment – $160,000

Gain – $40,000 and Equipment – $150,000

Gain – $40,000 and Equipment – $160,000

Answer rating: 100% (QA)

Solution answer will be Gain 40000 and equipment 150000 ... View the full answer