can you please explain these answers again simply A company trades a truck which cost $20,000 and has accumulated depreciation of $6,000, for a newequipment (machine) which has a list price of $25,000. The regional distributor of the equipment allows a$23,000 trade-in, and $2,500 is paid in cash. The truck being traded-in could be sold for $15,000 in thewell-established second-hand market.43) The fair value of the new machine acquired to be used in the journal entry to record the trade andacquisition is:a) 25,000b) 23,000c) 17,000d) 16,000e) None of the aboveThe fair value of the new truck is $15,000+ $2,500 = $17,500. The fair value of the new truck is notevident (list prices are seldom the final negotiated fair value). This is a non-monetary exchange where theeconomic situation has not changed: there is little monetary consideration involved in this exchange andthere is no reason to expect the risks, timing or amounts of future cash flows of the business would bealtered by this exchange. Losses, but not gains should be recognized in a non-monetary exchange such asthis one.44) The journal entry to record the trade and acquisition will show the following:a) Dr Cash $2,500b) Dr Accumulated Depreciation $6,000c) Dr Loss on Disposition $1,000d) Dr Truck $20,000e) None of the above45) The journal entry to record the trade and acquisition will show the following:a) Cr Loss on Disposal $500b) Cr Accumulated Depreciation $6,000c) Cr Gain on Disposition $1,000d) Cr Machine (new) $23,000e) None of the aboveDebit Machine New ....Debit Accumulated Depreciation...........$6,000Credit Gain on Disposition..Credit Truck Old....Credit Cash .....$17,000.$ 500.$20,000..$ 2,500

The traded in of an asset is a financial transaction in which an old asset is disposed off for the…

A company trades a truck which cost $20,000 and has accumulated depreciation of $6,000, for a new equipment (machine) which has a list price of $25,000. The regional distributor of the equipment allows a $23,000 trade-in, and $2,500 is paid in cash. The truck being traded-in could be sold for $15,000 in the well-established second-hand market.

A company trades a truck which cost $20,000 and has accumulated depreciation of $6,000, for a new equipment (machine) which has a list price of $25,000. The regional distributor of the equipment allows a $23,000 trade-in, and $2,500 is paid in cash. The truck being traded-in could be sold for $15,000 in the well-established second-hand market.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 12PB: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny...

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