Dietz owned a delivery van with a book value of 3,000. It traded this old van in on a new one which cost 19,000. The dealer allowed Dietz a trade in allowance of 4,500 on the old van, and Dietz paid the remainder in cash.
Compute the following:
a) The amount of cash Dietz must pay to purchase the new van
b) The gain on disposal of the old van to be reported in Dietz's financial statements
c) The gain on disposal of the old van to be reported in Dietz's income tax return