On December 1, 2010, Lear Company Acquired a New Delivery

question 63

Multiple Choice

On December 1, 2010, Lear Company acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2007.The old truck was purchased for $20,000 and had a book value of $7,600.On the date of the exchange, the old truck had a market value of $8,000.In addition, Lear paid $26,000 cash for the new truck, which had a list price of $36,000.At what amount should Lear record the new truck for financial accounting purposes?

• A)$26,000.
• B)$33,600.
• C)$34,000.
• D)$36,000.

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Definitions:

Allocation of Resources

The distribution of available resources, including land, labor, and capital, among various uses to maximize efficiency and effectiveness.

Foreign Demand

The desire and willingness of buyers in other countries to purchase goods and services from a particular nation.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified period.

Motorcycle Imports

Refers to the bringing in of motorcycles from foreign countries into a domestic market usually subject to tariffs, quotas, and regulations.