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Asset exchange P5 Caleb Co. owns a machine that costs $ 42,400 with accumulated depreciation of $ 18,400. Caleb exchanges the machine for a newer model that has a market value of $ 52,000.
(1) Record the exchange assuming Caleb paid $ 30,000 cash and the exchange has commercial substance.
(2) Record the exchange assuming Caleb pays $ 22,000 cash and the exchange lacks commercial substance.
Explain the problem with authority and resoning
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Gains and losses appear on which of the financial statements listed below?
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