Reference no: EM132731177

Entity A exchanged equiptment with entity B.

Data is below                                    Entity A                  Entity B

Carrying Amount                           85,000                   130,000

Fair Value                                      95,000              indeterminable

Cash paid by entity B to A                                       15,000

Problem 1: If the exchange has commercial substance, how much is the initial measurement of the equiptment received by Entity b?

a 95,000

b. 115,000

c. 110,000

Problem 2: If the exchange has commercial Substance, how much is the gain (loss) recognized by Entity B in the exchange?

a. (50,000)

b. (35,000)

c. 0