A firm trades in an old truck with a fair value of $26,000 and a carrying value of $21,000 for new truck that has a list price of $33,000. To complete the transaction, the firm gives the dealer $4,000 cash. At what value will the firm record the new truck?
A) $4,000
B) $33,000
C) $30,000
D) $26,000

Question

Quizplus · Accepted Answer

The new truck is recorded at the fair value of the old truck ($26,000) plus the cash paid ($4,000), totaling $30,000.

A Firm Trades in an Old Truck with a Fair