On December 1, 2007, Fiene Company acquired a new delivery truck in exchange for an old...
On December 1, 2007, Fiene Company acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2004. The old truck was purchased for $35,000 and had a book value of $13,300. On the date of the exchange, the old truck had a market value of $14,000. In addition, Fiene paid $45,500 cash for the new truck, which had a list price of $63,000. The exchange had commercial substance. At what amount should Fiene record the new truck for financial accounting purposes?
A. $45,500.
B. $58,800.
C. $59,500.
D. $63,000.
Homework Answers
New truck should be recorded at = Book value of Old truck + Cash paid
= $13300+45500
= $58800
Option B. is correct answer.
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