Multiple Choice
Use the following information for question 166 - 167.
Maverick Inc. exchanged an old vehicle for a new vehicle on August 31, 2014. The original cost of the vehicle was $45,000 on January 1, 2010. Depreciation was calculated using the straight line method over a ten-year useful life, with an estimated residual value of $3,000. The fair value of the old vehicle on August 31, 2014 was $21,500. The list price of the new vehicle was $30,000. Maverick received a $24,000 trade in allowance from the dealership and paid $6,000 cash for the new vehicle.
-As a result of this transaction, the company would record which of the following?
A) DR. Loss on Disposal $3,900
B) CR. Vehicle $23,500
C) CR. Gain on Disposal $3,900
D) Cr. Cash $24,000
Correct Answer:
Verified
Correct Answer:
Verified
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