7. Ames Co. purchased a machine 5 years ago at a cost of $28,000. After taking $15,000 of

7. Ames Co. purchased a machine 5 years ago at a cost of $28,000. After taking $15,000 of depreciation on that machine, it traded it in on a new machine with a cost of $45,000. Ames received a trade-in allowance of $10,000 towards the cost of the new machine

How much gain or loss should Ames record on the trade-in?

a.$(3,000) loss
b.$(5,000) loss
c.$(18,000) loss
d.No gain or loss.
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