Question

Movelt Corporation is the world’s leading express distribution company in addition to the wirkd’s fleet of all-cargo aircraft, the company has more than 54,000 ground vehicles that pick up and deliver packages. Assume that Movelt sold a delivery truck for $29,000. Movelt had originally purchased the truck for $49,000 and had recorded depreciation for three years.

Calculate the amount of gain or loss on disposal, assuming that Accumulated Depreciation was a) $20,000 b) $17,000 or c) $25,000

Gain/Loss and Amount

Using the following structure, indicate the effects of the disposal of the truck, assuming the Accumulated Depreciation was a) $20,000 b) $17,000 and c) $25,000.

Assets - Liabilities + Stockholders Equity

Enter any decreases to Assets, Liabilities or SE with minus sign

Answer 1

	Case A	Case B	Case C
Selling price	$                                       29,000	$                                       29,000	$                                       29,000
Less: Book value of truck	$49,000-$20,000 = $29,000	$49,000-$17,000 = $32,000	$49,000-$25,000 = $24,000
Gain (loss) on sales	$                                                   -	$                                       (3,000)	$                                          5,000

	Assets	=	Liabilities	+	Stockholders Equity
a	$   29,000
	$ (29,000)
b	$   29,000
	$ (32,000)
					$                            (3,000)
c	$   29,000
	$ (24,000)
					$                              5,000

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