A fixed asset with a cost of $40,000 and accumulated depreciation of $38,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,500, the cost basis of the new asset is:
A. $59,000
B. $58,000
C. $60,000
D. $62,000
Answer:C
A fixed asset with a cost of $40,000 and accumulated depreciation of $38,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,500, the cost basis of the new asset is:
A. $59,000 B. $58,000 C. $60,000 D. $62,000