Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of $300,000 and accumulated depreciation of $120,000. The new sailboat had an invoice price of $326,000. Hunter received a trade in allowance of $192,000 on the old sailboat, which meant the company paid $134,000 in addition to the old sailboat to acquire the new sailboat. If this transaction has commercial substance, what amount of gain or loss should be recorded on this exchange

a gain of $12,000 should be recorded on this exchange.

Explanation:

Hint : Treat the Old Sailboat as if it was Sold for an Amount equal to the trade-in allowance since the transaction has commercial substance

Journal Entry to record the Exchange of the Old Sailboat

Trade - In Allowance $192,000 (debit)

Accumulated depreciation  $120,000 (debit)

Sailboat - Cost $300,000 (credit)

Gain on Exchange of Old Sailboat $12,000 (credit)

a loan? that’s my guess, anywho.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know