Journal entry to record the trade-in of old truck

Reference no: EM13972890

National Truck Company is a large trucking company that operates throughout the United States. National Truck Company uses the units-of-production (UOP) method to depreciate its trucks. National Truck Company trades in trucks often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the company's fleet: When acquired in 2012, the tractor-trailer rig cost $360,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $50,000. During 2012, the truck was driven 75,000 miles; during 2013, 85,000 miles; and during 2014, 135,000 miles. After 39,000 miles in 2015, the company traded in the Mack truck for a less-expensive Freightliner with a sticker price of $210,000. National Truck Company paid cash of $20,000.
Determine National's gain or loss on the transaction. Prepare the journal entry to record the trade-in of the old truck on the new one.

Reference no: EM13972890

Questions Cloud

Review of academic research literature on a specific topic : The research paper involves a thorough review of academic research literature on a specific topic or issue involving a critical infrastructure.Specifically, a local site is to be examined and discussed.

Available assurance service to clients : Explain the auditing and other assurance services your firm offers and the benefit each has for the client. Explain your role in providing the available assurance service to clients.

Find the intensity of the light that reaches photocell : Unpolarized light whose intensity is 1.40 W/m2 is incident on the polarizer as shown in the figure. If the analyzer is set at an angle of theta = 80o with respect to the polarizer, what is the intensity of the light that reaches the photocell

Assume the sales mix remains unchanged : Use Pepperpike Coffee's operating leverage factor to determine its new operating income if sales volume increases 15%. Prove your results using the contribution margin income statement format. Assume the sales mix remains unchanged.

Journal entry to record the trade-in of old truck : National Truck Company paid cash of $20,000. Determine National's gain or loss on the transaction. Prepare the journal entry to record the trade-in of the old truck on the new one.

Which is not a common characteristic of entrepreneurs : A mission statement should answer which of the following questions? A small business owner needs to remember that when it comes to employee involvement in the strategic planning process,

Explaining the tax consequences : The plan lets the beneficiary of an employee who dies before pay- ments begin take the plan balance as an annuity or in a lump sum. Harvey elects to take the $250,000 plan balance in a lump sum. Write a letter to Harvey explaining the tax conseque..

What is the intensity of the light that reaches photocell : Unpolarized light whose intensity is 1.80 W/m2 is incident on the polarizer in the figure. If the analyzer is set at an angle of θ = 76o with respect to the polarizer, what is the intensity of the light that reaches the photocell

What is weighted mean for annual utility plant investment : Using the annual number of employees as weights, what is the weighted mean for annual utility plant investment per employee during this period?

User Account

All Pages