On May 15, 2010, Retread Company acquired a new forklift in exchange for an old forklift that it had acquired in 2000.The old forklift was purchased for $20, 000 and had a book value of $5, 000.On the date of the exchange, the old forklift had a market value of $6, 000.In addition, Retread paid $18, 000 cash for the new forklift, which had a list price of $25, 000.At what amount should Retread record the new forklift for financial accounting purposes?

Question

Quizplus · Accepted Answer

The new forklift should be recorded at the fair value of what was given up (the old forklift's market value of $6,000 plus the $18,000 cash paid), totaling $24,000. However, due to a calculation error in my response, the correct total should be $24,000, not $23,000 as initially stated. The correct choice, based on the calculation provided, should be B) $24,000.

On May 15, 2010, Retread Company Acquired a New Forklift