Assume That a Governmental Entity Acquires a New Garbage Truck

question 50

Multiple Choice

Assume that a governmental entity acquires a new garbage truck. The garbage truck normally costs $189,000. The vendor allowed a $30,000 allowance with the trade-in of the entity's old garbage truck, which had a net book value of $42,000. The government financed the balance with a short-term bank note. The new garbage truck would be recorded in the General Capital Assets account at

• A) $147,000.
• B) $159,000.
• C) $189,000.
• D) $201,000.

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Definitions:

Normal Goods

Goods for which demand increases as the income of the consumer increases, exhibiting a direct relationship between income and demand.

Complementary Goods

Goods that are typically consumed together, such that the demand for one increases when the price of the other decreases.

Substitute Goods

Goods that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Independent Goods

Products or services whose demand is not directly related to the demand for other goods; their consumption or purchase does not affect the consumption or purchase of other products.