Answer:
1) Calculate the amount of gain or loss on disposal, assuming that Accumulated Depreciation was:
(a) $12,000, 0
(b) $10,000, Loss 2000
(c) $15,000. Gain 3000
2) Using the following structure, indicate the effects (accounts, amounts, and + or -) for the disposal of the truck in each of the three preceding situations.
Assets = Liabilities + Stockholders' Equity
Cash+Net Fixxed Asset=Liabilities+truck sold+sale-net-loss in sale
´=16000+(-28000+12000)=0+(16000-(28000-12000))
3) Prepare the journal entry to record the disposal of the truck for each situation in requirement 1.
Depreciation a 12000
Db Cash___________________ 16000
Depreciation________________ 12000
Fix asset____________________________________ 28000
Depreciation b 10000
Db Cash___________________ 16000
Depreciation_______________ 10000
Fix asset____________________________________ 28000
Loss in disposal of fixed asset_______2000
Depreciation c 15000
Db Cash___________________ 16000
Depreciation________________ 15000
Fix asset____________________________________ 28000
Income in disposal of fixed asset__________________ 3000
Explanation:
Truck sold 16000
Purchased 28000
Depreciation a 12000
Depreciation b 10000
Depreciation c 15000
Cash+Net Fixxed Asset=Liabilities+truck sold+sale-net-loss in sale
´=16000+(-28000+12000)=0+(16000-(28000-12000))
Depreciation a 12000
Db Cash___________________ 16000
Depreciation________________ 12000
Fix asset____________________________________ 28000
Depreciation b 10000
Db Cash___________________ 16000
Depreciation_______________ 10000
Fix asset____________________________________ 28000
Loss in disposal of fixed asset_______2000
Depreciation c 15000
Db Cash___________________ 16000
Depreciation________________ 15000
Fix asset____________________________________ 28000
Income in disposal of fixed asset__________________ 3000
