Question

E9-9 Demonstrating the Effect of Book Value on Reporting an Asset Disposal (LO 9-5) [The following information applies to the questions displayed below.] Movelt Corporation is the world's leading express-distribution company. In addition to its 643 aircraft, the company has more than 57,000 ground vehicles that pick up and deliver packages. Assume that Movelt sold a delivery truck for $21,000. Movelt had originally purchased the truck for $35,000 and had recorded depreciation for three years.

Answer 1

69-9. solution : La D Gain I loss . Amount a... None bo. Loss c. Gain 10 $ 3,000 $5,000 : "Explanation: Optional option 'b? oftione? i) Truck purchased $35,000 $35,000 $35,000 ii) Truck sale value $21,000 $21,000 $21,000 111) Accumulated Depreciation $ 16,000 $11,000 $19.000 .. iU) Gain I (Loss) on Truck 10 ($3,000) $5.000 Li-ii-iii)

2 using the structure, indicating the effects t Etteitt Skzek یادم . بار بار Assets = Liabilities a) Truele. -$21,000. posted .. cash +$ 211000 b) Truck tash -$21.000 +$21,000 e) Truck - $21,000. +$21,000 Cash A Notes Truck value - Truck purchase cost - Acc. Depreciation .- Loss on disposal & Gain on Disposal

Iransaction eas Debit (3) Credit26) $211000 $16000 : $35,000 Journal Entries General Journal Gash Accumulated Depresieition : Trucke (to record sale of truck . when acc.dep is $141000) cash Accumulated Depreciation Loss on truck Disposal Truck to record sale of bruck When accumulated : Depreciation is & 11,000) $ 21,000 $11,000 $3,000 $35,000

$21,000 $19,000 . $35,000 $5,000 Cash Accumulated Depreciation Truck Gain on Truck Disposal (to record sale ê truck When Accumulated .. Depreciation is $19.000) e ope n 1 ::
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