Question

TOC company exchanged no. of used trucks plus cash for a semi-truck. The used trucks have...

TOC company exchanged no. of used trucks plus cash for a semi-truck. The used trucks have a combined book value of $42,000 (Cost=64,000 less Acc.dep= 22,000). The used trucks have a fair value of $49,000. TOC company will also pay extra $11,000 cash for the semi-truck.
Calculate cost of semi-truck and record journal entries.
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Answer #1
Calculation of cost of Semi Truck
Value ($)
Fair Value of Truck exchenage      49,000
Cash Paid      11,000
Total Cost of Semi Truck      60,000
P&L on sale of used Truck
Fair Value of Used Truck      49,000
Less:- Book value of truck (64000-22000)      42,000
Gain on Used Truck        7,000
Journal Entry Dr. Cr.
Truck (Semi) 60,000
Accumulated Depreciation on truck 22,000
    Truck-used      64,000
    Gain on Used truck        7,000
    Cash      11,000
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