Question

Cliff Company traded in an old truck for a new one. The old truck had a cost of $130,000 and accumulated depreciation of $65,000. The new truck had an invoice price of $135,000. Huffington was given a $63,000 trade-in allowance on the old truck, which meant they paid $72,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck

Answer 1

Answer:

the recorded value of the new truck is $135,000

Explanation:

The computation of the recorded value of the new truck is given below;

In the case when the transaction has the commercial substance so the recorded value of the new truck would be equivalent to the invoice price or the fair value i.e. $135,000

Hence, the recorded value of the new truck is $135,000

The same would be considered and relevant

And all other values are to be ignored