E7-38B. (Learning Objectives 1, 2, 3: Measuring a PPEs cost; using UOP depreciation; trading in a used asset) EasyTruck Company is a large trucking company that operates throughout the EU. EasyTruck Company uses the units-of-production (UOP) method to depreciate its trucks.

EasyTruck Company trades in trucks often to keep driver morale high and to maximize fuel economy. Consider these facts about one Mack truck in the companys fleet. When acquired in 20X6, the rig cost 360,000 and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was 100,000. During 20X6, the truck was driven 79,000 miles; during 20X7, 119,000 miles; and during 20X8, 158,000 miles. After 44,000 miles in 20X9,

the company traded in the Mack truck for a less expensive Freightliner with a sticker price of 300,000. EasyTruck Company paid cash of 24,000. Determine EasyTrucks gain or loss on the transaction. Prepare the journal entry to record the trade-in of the old truck on the new one.