Final answer:
Blossom Corporation traded a used truck for a new truck and also made a cash payment. To calculate the gain or loss on the exchange, we need to determine the carrying amount of the used truck and subtract it from the fair value of the new truck.
Step-by-step explanation:
Based on the information provided, Blossom Corporation traded a used truck for a new truck. The cost of the used truck was $29,000, and it had accumulated depreciation of $24,650. The value of the new truck is $50,750. Additionally, Blossom Corporation made a cash payment of $47,850.
To determine the gain or loss on the exchange, we need to calculate the carrying amount of the used truck. The carrying amount is the cost of the asset minus its accumulated depreciation. In this case, the carrying amount is $29,000 - $24,650 = $4,350.
The gain or loss on the exchange is then calculated by subtracting the carrying amount of the used truck from the fair value of the new truck. In this case, the gain/loss is $50,750 - $4,350 = $46,400.