Question
A truck costs $89,000 when new and has accumulated depreciation of $80,000. Suppose Frank Towing exchanges the truck for a new truck. The new truck
A truck costs $89,000 when new and has accumulated depreciation of $80,000. Suppose Frank Towing exchanges the truck for a new truck. The new truck has a market value of $57,000, and Frank pays cash of $45,000. Assume the exchange has commercial substance. What is the result of this exchange?
A. No Gain or loss
B. Loss of $3,000
C. Gain of $48,000
D. Gain of $3,000
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GAO Financial Audit Manual Volume 3 June 2018
Authors: United States Government GAO
2018 Edition
979-8733166001
