QUESTION 37

Rory City traded in a used pickup for a new pickup truck with a sticker price of $44,000. The old pickup had a fair value of $26,000, historical cost of $47,000, and accumulated depreciation of $18,000. The dealer took the old truck and $16,000 for the new truck. The amount of gain or loss that should be recognized on this transaction in the government-wide financial statements is

1. $0.
2. $1,000 gain.
3. $3,000 loss.
4. $1,000 loss.