[The following information applies to the questions displayed below. Movelt Corp

Question

[The following information applies to the questions displayed below. Movelt Corporation is the world's leading express-distribution company. In addition to the world's largest fleet of all-cargo aircraft, the company has more than 54,000 ground vehicles that pick up and deliver packages. Assume that Movelt sold a delivery truck for $14,000. Movelt had originally purchased the truck for $23,000 and had recorded depreciation for three years. 9.00 points 1. Calculate the amount of gain or loss on disposal, assuming that Accumulated Depreciation was (a) $9,000, (b) $7,000, and (c) $15,000. (Select "None" if there is no Gain or Loss.) Gain/Loss Amount a. b. C.

Explanation / Answer

Answer

Cost

Accumulated Depreciation

Book Value

Sold for

Gain or Loss

Amount

a.

23000

9000

14000

14000

None

0

b.

23000

7000

16000

14000

Loss

$2000

c.

23000

15000

8000

14000

Gain

$6000

Assets

Liabilities

Stockholder's Equity

a.

Cash

14000

Vehicles

-23000

Accumulated Depreciation

9000

b.

Cash

14000

Retained Earnings

-2000

Vehicles

-23000

Accumulated Depreciation

7000

c.

Cash

14000

Retained Earnings

6000

Vehicles

-23000

Accumulated Depreciation

15000

Case

General Journal

Debit ($)

Credit ($)

a.

Cash

14000

Accumulated Depreciation

9000

Vehicles

23000

b.

Cash

14000

Accumulated Depreciation

7000

Loss on disposal

2000

Vehicles

23000

c.

Cash

14000

Accumulated Depreciation

15000

Vehicles

23000

Gain on disposal

6000

Cost

Accumulated Depreciation

Book Value

Sold for

Gain or Loss

Amount

a.

23000

9000

14000

14000

None

0

b.

23000

7000

16000

14000

Loss

$2000

c.

23000

15000

8000

14000

Gain

$6000

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