Trade-in on purchase of new asset (Learning Objectives 3 & 5) 15–20 min.

Maple Valley Transport is a large trucking company. Maple Valley Transport uses the units-of-production (UOP) method to depreciate its trucks. In 2013, Maple Valley Transport acquired a Mack truck costing $385,000 with a useful life of six years or 1,500,000 miles. Estimated residual value was $85,000. The truck was driven 182,000 miles in 2013, 263,000 miles in 2014, and 254,000 miles in 2015. After 62,000 miles in 2016, Maple Valley Transport traded in the Mack truck for a new Freightliner that costs $422,000. Maple Valley Transport received a $243,000 trade-in allowance for the old truck and paid the difference in cash. Journalize the entry to record the purchase of the new truck.

AppendixLO1