Question

A trucking company sold its fleet of trucks for $56,800. The trucks originally cost $1,496,000 and had Accumulated Depreciation of $1,287,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?

Answer 1

Answer:

the trucking company recorded a loss on disposal of $152,200 when it sold the fleet of trucks.

Explanation:

Open the Truck Disposal T-Account as Follows:

Debits :

Cost                                                      $1,496,000

Totals                                                    $1,496,000

Credits:

Cash Receipt                                           $56,800

Accumulated Depreciation                $1,287,000

Profit and Loss (Balancing figure)         $152,200

Totals                                                   $1,496,000

Therefore, there was a loss on disposal of $152,200

Answer 2

Answer:

loss on disposal =$152,200

Explanation:

The gains on disposal is the the difference between the net sales proceeds on disposal and the carrying value of the assets as the date of disposal.

The carrying value = Cost  of the assets - accumulated depreciation to date

Carrying value = $1,496,000- $1,287,00

                       =209,000

Loss on disposal = $56,800 - $ 209,000 = -152,200