company. in addition to the world\'s langest feet of -cgo aircraf, the company h
ID: 2568378 • Letter: C
Question
company. in addition to the world's langest feet of -cgo aircraf, the company hes more than 54,000 ground vehicies that pick up and deliver packages Assume het Movel soid a delivery truck for $16.000. Movelt had oiginally purchased the truck for $27,000and recorded depreciation for three yeèrs 9.00 points Required Cacuate the amount of gain or loss on disposat,assuming that Apoumuaned Depreciation was (a) $11,000. sa.000, ara te) S 13,000 (Select-None., there is no Gaia er Loss.) depreciation balance of s11,000 at the time of disposal. s8.000 at the time of disposal.Explanation / Answer
Answer:
1
Gain/loss
Amount
a
No gain-no loss
0
b
Loss
(3000)
c
Gain
2000
Working notes for the above answer
a)
Sales Price
16000
less: Book value of the truck
27,000
Cost
Less: accumulated Depreciation
11,000
Book value of the truck
16,000
Gain/loss
0
b)
Sales Price
16000
less: Book value of the truck
27,000
Cost
Less: Accumulated Depreciation
8,000
Book value of the truck
19,000
Loss on sale of truck
-3,000
c)
Sales Price
16000
less: Book value of the truck
27,000
Cost
Less: accumulated Depreciation
13,000
Book value of the truck
14,000
Gain on sale of truck
2,000
____________________________________________________________
2
The effects on disposal of the truck, assuming that Accumulated Depreciation
Assets
=
Liability
+
Share holder's
equity
a
Cash (+) 16000
Delivery truck (-)16,000
b
Cash (+) 16000
Delivery truck (-)19,000
Loss (-)3,000
C
Cash (+) 16000
Delivery truck (-)14,000
Gain (+)2,000
_____________________________________________-
3
The journal entry to record the disposal of the truck,
Situation
Description
Debit $
Credit $
(a)
Cash
16,000
Accumulated depreciation
11,000
Equipment-delivery truck
27,000
(To record the sale of delivery truck)
(b)
Cash
16,000
Accumulated depreciation
8,000
Loss on sale of truck
3,000
Equipment-delivery truck
27,000
(To record the sale of delivery truck)
(c)
Cash
16,000
Accumulated depreciation
13,000
Equipment-delivery truck
27,000
Gain on sale of truck
2,000
(To record the sale of delivery truck)
Gain/loss
Amount
a
No gain-no loss
0
b
Loss
(3000)
c
Gain
2000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.