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Home Q & A Board Other Fields Homework Help Business Accounting
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mkendrick08 mkendrick08
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5 years ago
A truck was acquired for $100,000 and has accumulated depreciation of $70,000.  The business exchanges the truck for a new one. The new truck has a market value of $120,000 and the business pays $100,000 cash. Assume the exchange has commercial substance. Prepare the journal entry to record this transaction.
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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wrote...
#1
5 years ago
 
Truck (new)120,000
Accumulated DepreciationTruck70,000
Loss on Disposal10,000
Truck (old)100,000
Cash100,000

Explanation:
Calculation of gain or loss on exchange:

Market value of assets received$120,000
Less:
Book value of asset exchanged$30,000
Cash paid100,000(130,000)
Gain or (Loss)$(10,000)
mkendrick08 Author
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#2
5 years ago
Literally the most helpful website ever
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#3
5 years ago
Monkey
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