6.A truck purchased by Ace Trucking Co. costs $80,000. It is expected to last for 10 years but to be traded-in after 3 years for a newer model (the trade-in allowance will be about $2,000).

The trade in allowance is not part of the depreciation calculation

The truck will be depreciated over 10 years

None of the above

The truck will be depreciated over 3 years

The truck will be depreciated at one rate the first three years and at a different rate the remaining 7 years

5.If Ace Company and Deuce Company trade machines, Ace should set up the new machine

None of the above are correct statements

At zero since there was no cash paid

At fair market value unless the machines are deemed similar and there is no culmination of the earnings process

At the net book value of the machine given up

At the net book value of the machine given up