A truck costs $ 50,000 when new and has accumulated depreciation of $ 35, 000. Suppose Wilson Towing exchanges the truck for a new truck. The new truck has a market value of $ 60, 000, and Wilson pays cash of $ 40,000. Assume the exchange has commercial substance. What is the result of this exchange?
A. No gain or loss
B. Gain of $ 5,000
C. Loss of $ 5,000
D. Gain of $ 45,000
Ans: B. Gain of $ 5,000
Business
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