A company traded an old forklift for a new forklift, receiving a $13,500 trade-in allowance and paying the remaining $47,200 in cash. The old forklift had cost $43,000, a 5-year useful life and a $5,000 salvage value. Straight-line accumulated depreciation of $27,200 had been recorded as of the exchange dateRequired:1. What was the book value of the old forklift on the date of the exchange?2. What amount of gain or loss (indicate which) should be recognized in recording the exchange, assuming the transaction has commercial substance?3. What amount should be recorded as the cost of the new forklift?
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