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Question - Shale owned a truck with cost of 10,000, accumulated depreciation of $8,000. It traded this old truck in on a new one which cost $15,000. The dealer allowed a trade-in allowance of $4,000 on the old truck (thus Shale paid $11,000).
a) What is the book value of the old truck?
b) What is the loss or gain on disposal of the old truck to be reported on financial statements?
c) What is the cost assigned the new truck in financial statements?
d) Record the journal entry if the transaction lacked commercial substance.
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