Warrior Dash Express Inc

question 24

Multiple Choice

Warrior Dash Express Inc.owns a moving van that originally cost $500,000 and currently has $450,000 of accumulated depreciation.The fair value of the moving van is $120,000.Warrior Dash Express Inc.exchanges the van plus $480,000 in cash for a new moving van costing $600,000. The entry to record the transaction is as follows:

• A)Equipment (new van) ........... 600,000
• Accumulated Depreciation (old van) ....................450,000
• Equipment (old van) ....................... 500,000
• Cash ..............................480,000
• Gain on Trade-in of Old Van ................ 70,000
• B)Equipment (new van) ............................... 600,000
• Accumulated Depreciation (old van) .............450,000
• Equipment (old van) ..................... 570,000
• Cash ............................ 480,000
• C)Equipment (new van) ............... 600,000
• Accumulated Depreciation (old van) ....................380,000
• Equipment (old van) ......................... 500,000
• Cash ....................................... 480,000
• D)Equipment (old van) ...............500,000
• Cash ........................ 480,000
• Gain on Trade-in of Old Van ...........................70,000
• Equipment (new van) ..................................... 600,000
• Accumulated Depreciation (old van) .............450,000
• E)Equipment (old van) ................. 570,000
• Cash ............................. 480,000
• Equipment (new van) ................... ... ... 600,000
• Accumulated Depreciation (old van) ..................... .....450,000

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