Problem 4 Worth 4 pts . --.25 pts for each account title and amount Mini Compute

Question

Problem 4 Worth 4 pts. --.25 pts for each account title and amount Mini Computers purchased a delivery truck 4 years ago for $20,000. Currently the accumulated depreciation on the truck is $12,000. Required: Prepare journal entries to show the sale of the truck assuming each of the following situations independently: 1 The truck is sold for $10,000 cash. 2 The truck is sold for $5,000 cash. Solution: Date Account Debit Credit #1 #2 Problem 4 Worth 4 pts. --.25 pts for each account title and amount Mini Computers purchased a delivery truck 4 years ago for $20,000. Currently the accumulated depreciation on the truck is $12,000. Required: Prepare journal entries to show the sale of the truck assuming each of the following situations independently: 1 The truck is sold for $10,000 cash. 2 The truck is sold for $5,000 cash. Solution: Date Account Debit Credit #1 #2

Explanation / Answer

Original cost of the truck 20000 Accumulated depriciation 12000 WDV 8000 1) The truck is sold for 10000 Profit on sale of truck ( 10000 - 8000) 2000 Journal entry Cash 10000 Accumulated depriciation 12000              Truck 20000              Gain on sale of truck 2000 2) The truck is sold for 5000 Loss on sale of truck ( 8000 - 5000) 3000 Cash 5000 Accumulated depriciation 12000 Loss on sale of truck 3000              Truck 20000

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