A Machine That Was Purchased for $100,000 Has an Accumulated

Multiple Choice

A machine that was purchased for $100,000 has an accumulated depreciation of $70,000 as of the current date. The company exchanges the machine for a new machine. The new machine has a market value of $120,000 and company pays cash of $100,000. Assume the exchange has commercial substance. What is the result of this exchange?

A) gain of $10,000
B) gain of $5,000
C) loss of $10,000
D) loss of $30,000