When this truck was acquired in 2018, the tractor-trailer rig had cost $350,000 and was expected to remain in service for 10 years or 1,000,000 miles. Its estimated residual value was $110,000. During 2018, the truck was driven 81,000 miles; during 2019,140,000 miles; and during 2020,170,000 miles. After the truck was driven 36,000 miles in 2021, the company traded in the Mack truck for a Freightliner truck with fair market value of $230,000. In addition to the trade-in of the Mack truck, Safety Truck Company paid cash of 28,000 for the Freightliner truck.

Requirement 1:

Determine SafetySafety'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.)

Options: Book value, cost, depreciation cost, residual value, trade in value of old truck

_____ - _______ = gain (loss) on exchange

_____-______=?

Requirement 2. Prepare the journal entry to record the trade-in of the old truck on the new one. Use two decimal places for depreciation cost per mile. (Record debits first, then credits. Explanations are not required.)

Requirement 1. Determine Safety'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 exchange