Question

Required information 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] FedEx 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 FedEx sold a delivery truck for $16,000. FedEx had originally purchased the truck for $28,000 and had recorded depreciation for three years. E9-9 Part 2 2. Using the following structure, indicate the effects (accounts, amounts, and for increase and for decrease) of the disposal of the truck, assuming that Accumulated Depreciation was (a) $12,000, (b) $10,000, and (c) $15,000. (Enter any decreases to Assets Liabilities, or Stockholders' Equity with a minus sign.)

Answer 1

Answer-2:

Liabilities Stockholder's equity (a) (b) Loss on disposal $ (2,000) Assets Cash Accumulated depreciation Delivery truck Cash Accumulated depreciation Delivery truck Cash Accumulated depreciation Delivery truck $ $ $ $ $ $ $ $ $ 16,000 12,000 28,000) 16,000 10,000 (28,000) 16,000 15,000 (28,000) (c) Gain on disposal $ 3,000

Answer-4:

Transaction Credit General Journal Cash Accumulated depreciation Delivery truck $ $ Debit 16,000 12,000 $ 28,000 (b) $ $ $ 16,000 10,000 2,000 $ 28,000 Cash Accumulated depreciation Loss on disposal Delivery truck Cash Accumulated depreciation Gain on disposal Delivery truck $ $ 16,000 15,000 $ $ 3,000 28,000