Business, 25.03.2020 04:07 cubist7472

The Pizza Store trades in a delivery car for a newer model. The old delivery car has a cost of $ 9 comma 000 and accumulated depreciation of $ 7 comma 000. The Pizza Store pays cash of $ 6 comma 000. The fair value of the newer car is $ 17 comma 000. What is the gain or loss for the Pizza Store on the exchange of vehicles?

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Answer from: rsoriano9826

The gain on exchnage to Pizza Store is of $9000

Explanation:

The Net Book Value (NBV) of the old car is 9000 - 7000 = 2000

The cash paid for the new car is 6000.

The total cost to Pizza Store of trade is 6000 + 2000 = 8000

The asset received has a fair value of 17000.

There is a gain to Pizza store on exchange of vehicles.

The value of Gain = 17000 - 8000 = $9000

The entry for such an exchnage would be,

New Car at Cost 17000 Dr

Provision for depreciation - old car 7000 Dr

Cost of old car 9000 Cr

Cash 6000 Cr

Gain on exchnage/disposal 9000 Cr

Answer from: andy2461

$9,000 gain

Explanation:

we must first determine the price at which the old car was traded = fair market value of the newer car - additional cash paid = $17,000 - $6,000 = $11,000

now we must determine the basis for the old car = purchase cost - accumulated depreciation = $9,000 - $7,000 = $2,000

the gain on the trade = trade value - cost basis = $11,000 - $2,000 = $9,000 gain

Answer from: Quest

Some disadvantages to leasing a car is that you are counting on someone to give you money every week or month depending on what you decided and if they don't have all of it well what if you needed that money now you as well have to pay not in full. a disadvantages to purchasing a new vehicle is if it is used then not all the time will absolutely everything work. its almost like a trail and era. although if it is a new car they will try to though all these specials and deals at you in your lease and it can be very overwhelming if you are not use to it.

Answer from: Quest

Ibelieve the answer is ethos which is an appeal to ethics

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The Pizza Store trades in a delivery car for a newer model. The old delivery car has a cost of $ 9 c...

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