Harrod's Landscape Artists Acquired a New Truck for $42,000 Less

question 11

Multiple Choice

Harrod's Landscape Artists acquired a new truck for $42,000 less the trade-in allowance of $4,000 for his old truck.The old truck was purchased for $31,000 and had a book value of $5,000 on the exchange date.The entry to record the acquisition of the new truck will include a debit to the Truck account for

• A) $42,000.
• B) $41,000.
• C) $37,000.
• D) $36,000.

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Definitions:

MACRS

MACRS, or Modified Accelerated Cost Recovery System, is a method of depreciation in the United States that allows for faster asset expense recovery over time for tax purposes.

Cash Flows

The movement of money into and out of a business or project, considered crucial for gauging its financial health.

Incremental Changes

Small or minimal adjustments or changes that are made to improve a process, product, or system over time.

Replacement Projects

Projects undertaken by a company to replace old or obsolete assets in order to maintain or improve current operations.