Question: Spencer traded its old machine for a newer model on January 1, 2020. The old machine was purchased on January 1, 2016 at a cost

Spencer traded its old machine for a newer model on January 1, 2020. The old machine was purchased on January 1, 2016 at a cost of $20,000 and had accumulated depreciation of $12,000. The estimated fair value of the old machine was $6,000. The new machine was listed at $45,000 but Spencer received a trade-in allowance for the old machine of $8,000, so they had to pay $37,000 in the exchange. Calculate the cost of the new machine and the gain or loss reported on Spencer's books related to the exchange. Assume the exchange had commercial substance New machine cost-$43.000 loss of $2.000 New machine cost - $45.000, Gain of $2.000 New machine cost - $37.000, Loss of $2,000 New machine cost - $45.000, no gain or loss

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

AP 2-1 Individual Income Tax Instalments The following table contains information for Gladys Nite for the three years ending December 31, 2021, 2022, and 2023. The tax payable column is Gladys'...

Spencer traded its old machine for a newer model on January 1, 2020. The old machine was purchased on January 1, 2016 at a cost of $ 30,000 and had accumulated depreciation of $ 22,000. The estimated...

1.For companies that prepare financial statements in accordance with PFRS, plant, property, and equipment should be valued using which models? a.The revaluation model or the fair value model b.The...

Part 1: Non-Monetary Exchange On January 1, 2020, the Felix Company purchased a machine to use in the manufacture of its product The invoice cost of the machine was $260,000; at the time of...

U Instructions: Show any calculations in your bookle oklef Use the appropriate pas r kariate page in your booklet wisi showing your work. Round the answer to the nearest dollar. Problem 1 (14 points)...

help me The Adjusted bank and book balance would be a b $ 31,950 $ 31,450 $36,980 $ 39,830 Question 7 (2 points) An equipment costing $ 10,000 is purchased on January 1st, with residual value of $...

need the answer by tonight, thanks! on October 12, 2015, the company acquires 20 small cars to be used as delivery vehicles. The cost of these cars is $12,000 each and, for purposes of calculating...

GENERAL INSTRUCTION : For problem solving, round off your answers to nearest peso. Answers should have NO peso sign. Example : 2,487,159 1. The SYD method of depreciation is being used for a machine...

Solve the system of linear equation by using Cramer's rule . -2x -y -3z = 3 2x -3y + z = -13 2x - 3z = -11

Suppose F= (-y, 2z, xyz) and S is the part of the paraboloid z = 4x - y that lies above the plane z = 3 oriented upward. Use Stokes' Theorem to evaluate curl(F). ds O-2 O-T 0 T O2TT

Y Co . , a public corporation, issues a 5 % stock dividend when the market price is $ 1 0 per share. An individual, Jesse, received 1 0 0 shares as a result of this dividend. What amount must Jesse...

Which of the following are potential disciplinary actions an employer may take if an employee makes a false complaint, or provides false information in the course of an investigation?

Describe three situations that would require a businessperson to use the indirect plan for a negative message. (Objective 4)

Select the most effective plan for developing negative messages (direct or indirect) for the following situations and justify your choice: (Objective 2) a. A routine meeting is canceled. b. A...

Technology. You manage Sunset Lane, a small card and gift shop. On September 3, you ordered four cases of shower gel and four cases of body lotion, one of each in the following fragrances: White...