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Problem - A printing press priced at a fair market value of $275,000 is acquired in a transaction that has commercial substance by trading in a similar press and paying cash for the difference between the trade-in allowance and the price of the new press.
a. Assuming that the trade-in allowance is $90,000, what is the amount of cash given?
b. Assuming that the book value of the press traded in is $68,000, what is the gain or loss on the exchange?
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