Tetra Trucking Co. disposed of a truck (long-term asset). Tetra sold the truck on July 31 through
Question:
Tetra Trucking Co. disposed of a truck (long-term asset). Tetra sold the truck on July 31 through a broker for a negotiated price less a 6% broker commission. As a result of the sale, Tetra’s net income is expected to increase by $6,000 over the next five years. Before the sale on July 31, Oscar Corp. offered to lease the truck for five years for a total of $90,000. If the truck were leased to Oscar, Tetra would still pay maintenance, insurance, and license expenses estimated at $15,000 over the five-year lease period. At lease-end, the truck was expected to have no residual value. Calculate the negotiated sales price of the truck (round to nearest $1).
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach