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What should be the cost of the new truck

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Question - On January 2, 2012, Rapid Delivery Company traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow:

OLD TRUCK 

Original cost $36,000

Accumulated depreciation as of January 2, 2012 24,000

Average published retail value 11,000

NEW TRUCK 

List price $60,000

Cash price without trade-in 54,000

Cash paid with trade-in 45,000

What should be the cost of the new truck for financial accounting purposes?

A) $45,000.

B) $57,000.

C) $54,000.

D) $60,000.

Reference no: EM131796420

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