Question - On January 2, 2012, Rapid Delivery Company traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow:
OLD TRUCK
Original cost $36,000
Accumulated depreciation as of January 2, 2012 24,000
Average published retail value 11,000
NEW TRUCK
List price $60,000
Cash price without trade-in 54,000
Cash paid with trade-in 45,000
What should be the cost of the new truck for financial accounting purposes?
A) $45,000.
B) $57,000.
C) $54,000.
D) $60,000.