A Fixed Asset with a Cost of $52,000 and Accumulated

Multiple Choice

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, the cost basis of the new asset is

A) $54,000
B) $59,500
C) $60,000
D) $60,500