Question

on October 31, 2017 Aziz Company sells a truck that originally coat 140,000 SA for 95,000 SA cash. The truck was placed in service on January 1,2012. It was depreciated using the straight-line method with an estimated salvage value of 28,000 and a useful life of 10 years.

Record all the transactions?

Answer 1

working notes

step1

first you can calculate the depreciation on asset based on straight line method

depreciation = asset-scrap value /estimated life

=140,000- 28000 / 10

112,000 / 10 = 11,200

step2:

so here asset placed in service on jan 1 2012 and sold it on oct 31,2017

duration of asset used = 6 years

so calculate accumulated depreciation depreciatio for 6 years = 11,200*6= 67,200

book value of the asset on the oct 31,2017 is 140,000- 67,200 = 72,800

step3

calculate gain or loss on sale of asset

gain = selling price -book value

= 95000 -72,800

= 22,200

step4 journal entries

1) journal entry when you purchase asset

date	account title	debit	credit
jan 1,2012	truck account	140,000
	cash account		140,000

2) journal entry for accumulated depreciation

date	account title	debit	credit
oct 31 2017	depreciation expense	67,200
	accumulated depreciation		67,200

3) journal entry when asset sold

date	account title	debit	credit
oct 31,2017	cash	95000
	gain on sale of asset		22,200
	truck account		72,800

i have given all the calculations take as per your need and if you want any clarification please leav amessage and i will provide you