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Rainey Company purchased a computer that cost $45,000 on June 31, Year 1. This computer...

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Accounting

Rainey Company purchased a computer that cost $45,000 on June 31, Year 1. This computer had an estimated useful life of four years and a salvage value of $1,000.Rainey Company determines depreciation expense based upon the sumofyears digits method (round all numbers to the nearest whole number and all percentages to the nearest 2 decimal places).
On December 31, Year 2, the old computer is exchanged for a similar computer with a fair market value of $22,000. Assume this transaction lacks commercial substance. Determine the recognized gain/loss on the trade (if any) assuming each of the following independent scenarios:
a. Rainey Company paid $5,000 on the exchange
b. Rainey Company paid $500 on the exchange
c. Rainey Company received $3,000 on the exchange

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