On December 1, 2007, Fiene Company acquired a new delivery truck in exchange for an old delivery truck that it had acquired in 2004.The old truck was purchased for $35,000 and had a book value of $13,300.On the date of the exchange, the old truck had a market value of $14,000.In addition, Fiene paid $45,500 cash for the new truck, which had a list price of $63,000.The exchange lacked commercial sunstance.At what amount should Fiene record the new truck for financial accounting purposes?

Question

Quizplus · Accepted Answer

The new truck should be recorded at its fair value, which is the sum of the cash paid and the market value of the old truck. Therefore, the new truck should be recorded for $58,800 ($45,500 + $14,000).

On December 1, 2007, Fiene Company Acquired a New Delivery