Unformatted text preview: one asset for another asset that performs a different function. Trading in an old truck for a forklift is an example of a dissimilar exchange. Suppose a $90,000 delivery truck with a net book value of $10,000 is exchanged for a new delivery truck. The company receives a $6,000 trade-in allowance on the old truck and pays an additional $95,000 for the new truck, so a loss on exchange of $4,000 must be recognized. Cost of Truck Traded In $90,000 Less: Accumulated Depreciation (80,000) Net Book Value 10,000 Trade-in Value (6,000) Loss on Exchange $4,000...
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10