Hunter Sailing Company Exchanged an Old Sailboat for a New

Multiple Choice

Hunter Sailing Company exchanged an old sailboat for a new one.The old sailboat had a cost of $160,000 and accumulated depreciation of $100,000.The new sailboat had an invoice price of $270,000.Hunter received a trade in allowance of $70,000 on the old sailboat,which meant the company paid $200,000 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) $0 gain or loss.
B) $10,000 gain.
C) $10,000 loss.
D) $60,000 loss.
E) $70,000 loss.