Question

Cliff Company traded in an old truck for a new one. The old truck had a...

Cliff Company traded in an old truck for a new one. The old truck had a cost of $110,000 and accumulated depreciation of $66,000. The new truck had an invoice price of $48,000. Huffington was given a $38,000 trade-in allowance on the old truck, which meant they paid $10,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Particulars Amount
Market Value of New truck $                 48,000.00
Book Value of old truck(110000-66000) $                 44,000.00
Cash Paid $                 10,000.00
Loss $                  -6,000.00
In the Given Question Transaction Has Commercial Subtance
& There is a Loss on the Exhange
New Assets will be Recorded At Its MARKET VALUE that Is $48000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Beerbo Inc. traded a used truck for a new truck. Before this exchange of non-monetary assets...
Beerbo Inc. traded a used truck for a new truck. Before this exchange of non-monetary assets (ENMA), Beerbo's balance sheet show the used truck at a cost of $30,000 with an accumulated depreciation balance of $27,000. The fair value of the new truck is $37,000. Beerbo also paid $36,000 in the transaction. Assume the ENMA lacks commercial substance. How much must Beerbo record as the cost of the truck received? How much gain (loss) must Beerbo record from this transaction?...
Cedric Company recently traded in an older model computer for a new model. The old model’s...
Cedric Company recently traded in an older model computer for a new model. The old model’s book value was $323,000 (original cost of $673,000 less $350,000 in accumulated depreciation) and its fair value of the old equipment is $300,000. Cedric paid $73,000 to complete the exchange which has commercial substance. Required: Prepare the journal entry to record the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Spencer traded its old machine for a newer model on January 1, 2020. The old machine...
Spencer traded its old machine for a newer model on January 1, 2020. The old machine was purchased on January 1, 2016 at a cost of $ 30,000 and had accumulated depreciation of $ 22,000. The estimated fair value of the old machine was $ 4,000. The new machine was listed at $ 50,000 but Spencer received a trade-in allowance for the old machine of $ 8,000, so they had to pay $ 42,000 in the exchange. Calculate the cost...
Willis Bus Service traded in a used bus for a new one. The original cost of...
Willis Bus Service traded in a used bus for a new one. The original cost of the old bus was $54,900. Accumulated depreciation at the time of the trade-in amounted to $35,500. The new bus cost $79,500 but Willis was given a trade-in allowance of $10,800. a. What amount of cash did Willis have to pay to acquire the new bus? b. Compute the gain or loss on the disposal for financial reporting purposes.
Beerbo Inc. traded a used truck for a small computer. Before this exchange of non-monetary assets...
Beerbo Inc. traded a used truck for a small computer. Before this exchange of non-monetary assets (ENMA), Beerbo's balance sheet show the used truck at a cost of $20,000 with an accumulated depreciation balance of $18,000. The fair value of the small computer was $3,300. Beerbo also paid $500 in the transaction. Assume the ENMA lacks commercial substance. How much gain (loss) must Beerbo record from in this transaction? Input gains as positive numbers, losses as negative numbers (gains =...
Beerbo Inc. traded a used truck for a small computer. Before this exchange of non-monetary assets...
Beerbo Inc. traded a used truck for a small computer. Before this exchange of non-monetary assets (ENMA), Beerbo's balance sheet show the used truck at a cost of $9,000 with an accumulated depreciation balance of $3,000. The fair value of the small computer was $5,000. Beerbo also paid $3,000 in the transaction. Assume the ENMA has commercial substance. What is the total fair value given by Beerbo in this transaction? What is the total fair value received by Beerbo in...
Crowe Company purchased a heavy-duty truck on July 1, 2014, for $30,000. It was estimated that...
Crowe Company purchased a heavy-duty truck on July 1, 2014, for $30,000. It was estimated that it would have a useful life of 10 years and then would have a trade-in value of $6,000. The company uses the straight-line method. It was traded on August 1, 2018, for a similar truck costing $42,000; $16,000 was allowed as trade-in value (also fair value) on the old truck and $26,000 was paid in cash. A comparison of expected cash flows for the...
A fixed asset with a cost of $30,105 and accumulated depreciation of $27,095 is traded for...
A fixed asset with a cost of $30,105 and accumulated depreciation of $27,095 is traded for a similar asset priced at $69,349. Assuming a trade-in allowance of $4,597, the cost basis of the new asset in a transaction with commercial substance is Select the correct answer. $4,597 $25,508 $1,587 $69,349 Mobile Co. issued a $43,955, 60-day, discounted note to Guarantee Bank. The discount rate is 9%. At maturity, assuming a 360-day year, the borrower will pay: Select the correct answer....
In a Section 1031 exchange, Giovanni traded in his old truck, which had an adjusted basis...
In a Section 1031 exchange, Giovanni traded in his old truck, which had an adjusted basis of $13,800, for a new one costing $30,000. Giovanni also gave $12,000 in cash. What is Giovanni's basis in the new truck?
Please do it by type not pics. 1.Wille Co. trades a used truck for a used...
Please do it by type not pics. 1.Wille Co. trades a used truck for a used car. The trade has been decided to lack commercial substance. The used truck had an original cost of $15,000 and accumulated depreciation of $7,500. The used truck has a fair value of $11,000. The car has a fair value of $9,000. In addition to the car, you receive $2,000. Calculate the amount of gain that will be recognized.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT