A Truck Costs $100,000 When New, and It Has an Accumulated

question 148

Essay

A truck costs $100,000 when new, and it has an accumulated depreciation of $70,000. Suppose the company exchanges the truck for a new truck. The new truck has a market value of $120,000 and company pays cash of $100,000. Assume the exchange has commercial substance. Journalize the transaction.

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Definitions:

Stock Trade

A Stock Trade involves the buying or selling of shares in a company through a stock market, reflecting the transfer of ownership in hopes of gaining a profit.

Check Kiting

The illegal act of exploiting the float to make use of non-existent funds in a checking or other bank account.

Rightful Owner

The individual or entity that legally possesses property or rights, often established through purchase or inheritance.

Criminal Fraud

A deliberate deception practiced to secure unfair or unlawful gain, often involving a false representation of fact.