Pedro borrowed $250,000 to purchase a machine costing $300,000. He later borrowed an additional $25,000 using the machine as collateral. Eight years later, the machine has an adjusted basis of zero and the two outstanding note balances are $145,000 and $18,000. Pedro sells the machine subject to the two liabilities, plus $45,000 cash. What is his realized gain or loss

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?