A company intends to purchase a motor vehicle with a list price of $24,400. The dealer offers a part exchange allowance and the balance of $15,000 is to be paid in cash. The old motor vehicle to be used in part exchange originally cost 20,600 USD and has accumulated depreciation to date of $12000.
How would the part exchange allowance be recorded by the company ?
DR Motor Vehicle $9400 CR Disposals $9400
DR Cash $15000 CR Disposals $15000
DR Disposals $15000 CR Cash $ 15000
DR Cash $9400 CR Disposals $9400
Please Solve this question I am very much confused Sir.
Many thanks
ACCA Forums
FAAllownace
I noticed you have also asked this question in the ask the tutor forum. Please try not to ask the same question on more than one forum as per this site's rules. This forum is primarily designed for students to help one another. If you want to ask the tutor something directly please use the ask the tutor forum. Hope this helps.
Anyone coming across this thread, the ask the tutor thread for this question can be found here-
https://opentuition.com/topic/allowance-14/
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