Prompt Truck Company is a large trucking company that operates throughout the United States. Prompt Truck Company uses the units-of-production (UOP) method to depreciate its trucks. Prompt Truck Compeny trades in truckS often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the company's fleet. When acquired in 20X6, the tractor-trailer rig cost $390,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $100,000 During 20X6, the truck was driven 78,000 miles, during 20X7, 118,000 miles and during 20XB, 156,000 miles. After 38 000 miles in 20X9, the company traded in the Mack truck for a loss expensive Freightliner with a sticker price of S300,000, Prompt Truck Company paid cash of $27 000 Requirements 1. Determine Prompt's gain or loss on the transaction 2 Prepare the journal entry to record the trade-in of the old truck for the new one. Requirement 1. Determine Prompt's gain or loss on the transaction Begin by determining the formula needed to calculate the gain or loss and then complete the calculation to determine the amount. (Use a minus sign or parentheses for a loss Round depreciation per unit to the nearest cent.) Gain (Loss) on oxchango
Prompt Truck Company is a large trucking company that operates throughout the United States. Prompt Truck Company uses the units-of-production (UOP) method to depreciate its trucks. Prompt Truck Compeny trades in truckS often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the company's fleet. When acquired in 20X6, the tractor-trailer rig cost $390,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $100,000 During 20X6, the truck was driven 78,000 miles, during 20X7, 118,000 miles and during 20XB, 156,000 miles. After 38 000 miles in 20X9, the company traded in the Mack truck for a loss expensive Freightliner with a sticker price of S300,000, Prompt Truck Company paid cash of $27 000 Requirements 1. Determine Prompt's gain or loss on the transaction 2 Prepare the journal entry to record the trade-in of the old truck for the new one. Requirement 1. Determine Prompt's gain or loss on the transaction Begin by determining the formula needed to calculate the gain or loss and then complete the calculation to determine the amount. (Use a minus sign or parentheses for a loss Round depreciation per unit to the nearest cent.) Gain (Loss) on oxchango
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
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Problem 10P: St. Johns River Shipyards welding machine is 15 years old, fully depreciated, and has no salvage...
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Transcribed Image Text:Prompt Truck Company is a large trucking company that operates throughout the United States. Prompt Truck Company uses the units-of-production (UOP) method to depreciate its trucks. Prompt Truck Company
trades in trucks often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the company's fleet, When acquired in 20X6, the tractor-trailer rig cost $390,000 and
was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $100,000. During 20X6, the truck was driven 78,000 miles, during 20X7, 118,000 miles; and during 20X8, 156,000
miles. After 38 000 miles in 20X9, the company traded in the Mack truck for a less expensive Freightliner with a sticker price of S300,000. Prompt Truck Company paid cash of $27,000
Requirements
1. Determine Prompt's gain or loss on the transaction.
2. Prepare the journal entry to record the trade-in of the old truck for the new one.
Requirement 1. Determine Prompt's gain or loss on the transaction
Begin by determining the formula needed to calculate the gain or loss and then complete the calculation to determine the amount. (Use a minus sign or parentheses for a loss. Round depreciation per unit to the
nearest cent)
Inc
Gain (Loss) on exchange
static)
Jar to) (
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