Recording the Disposal of an Asset at Three Different Sale Prices
FedEx 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 654 aircraft and 51,000 vehicles and trailers that pick up and deliver packages. Assume that FedEx sold a delivery truck that had been used in the business for three years. The records of the company reflected the following:
Delivery truck cost | $38,000 |
Accumulated depreciation | 23,000 |
Required:
1. Give the journal entry for the disposal of the truck, assuming that the truck sold for
a. $15,000 cash
b. $15,600 cash
c. $14,600 cash
2. Based on the three preceding situations, explain the effects of the disposal of an asset.
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