ANSWERS TO QUESTIONS
Book value, old machine, June 1, 2009: [$33,680 – $2,920 – ($3,140 X 3)] = $21,340 Fair market value 20,000 Loss on exchange 1,340 Cost of removal 75 Total loss $ 1,415 (Note to instructor: The above computation is done to determine whether there is a gain or loss from the exchange of the old machine with the new machine and to show how the ... ................
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