E99 Demonstrating the Effect of Book Value on Reporting an Asset Disposal [L?95]

Question

E99 Demonstrating the Effect of Book Value on Reporting an Asset Disposal [L?95] IThe following information applies to the questions displayed below It Corporation is the world s leading express-distribution company In addition to the world's largest fleet of all cargo aircraf, the company has more than 54,000 ground vehicles that pick up and deliver packages. Assume that Movelt sol ld a delvery truck for $27,000. Movet had originally purchased the truck for $45,000 and had recorded depreciation tor three years References Section Break E9-9 Demonstrating the Effect of Book value on Reporting an Asset Disposal (LO 9 5] 0.52 points E9-9 Part 1 Required: 1. Calculate the amount of gain or loss on disposal, assuning that Accunulated Depreciation was (a) 518,000, (b) $12 000, and (e) $21.000 (Select None if there is no Gain or Loss.) Gain/Loss Amount a. acer

Explanation / Answer

Gain amount book sale price Gain loss Value (loss) a. none 0 (45000-18000)= 27000 27,000 0 b. loss 6,000 (45000-12000)= 33000 27,000 -6000 c. gain 3,000 (45000-21000)= 24000 27,000 3000 Assets = liability + Stockholders Equity a. Cash 27,000 Retained earnings 0 Accumulated dep 18,000 Truck -45,000 b) Cash 27,000 Retained earnings -6000 Accumulated dep 12,000 Truck -45,000 c) Cash 27,000 Retained earnings 3,000 Accumulated dep 21,000 Truck -45,000

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