Trade-Ins
Dietz Owned a Delivery Van with a Book Value $\underline{\quad\quad}$

question 82

Essay

Trade-ins
Dietz owned a delivery van with a book value of $20,000. It traded this old van in on a new one which cost $160,000. The dealer allowed Dietz a trade-in allowance of $35,000 on the old van, and Dietz paid the remainder in cash.
Compute the following: (a) The amount of cash Dietz must pay to purchase the new van$ $\underline{\quad\quad}$
(b) The gain on disposal of the old van to be reported in Dietz's financial statements$ $\underline{\quad\quad}$
(c) The gain on disposal of the old van to be reported in Dietz 's income tax return$ $\underline{\quad\quad}$

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Definitions:

Distinct Customer Groups

Segments of the market differentiated by specific needs, characteristics, or behaviors, requiring tailored marketing strategies.

GE/McKinsey Portfolio

A strategic tool used for managing a business's portfolio of products or business units, plotting them on a grid to decide where to invest or disinvest.

Segment Attractiveness

Segment attractiveness refers to the degree to which a specific market segment is considered desirable to enter or compete in, based on factors like size, growth potential, and profitability.

Strategy Formation

Strategy formation is the process of developing the routes and methodologies an organization intends to use to achieve its long-term goals.