Question

Commonwealth Delivery 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 659 aircraft and 68,000 vehicles and trailers that pick up and deliver packages. Assume that Commonwealth Delivery 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	$	58,000
Accumulated depreciation		42,800

Required:

1. Prepare the journal entry for the disposal of the truck, assuming that the truck sold for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. $15,200 cash disposal of truck assuming it cost 15200

b. $16,900 cash disposal of truck assuming it cost 16900

c. $13,300 cash disposal of truck assuming it cost 13300

Answer 1

1. Prepare the journal entry for the disposal of the truck, assuming that the truck sold for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a) Journal entries :

Date	account and explanation	debit	credit
	Cash	15200
	Accumlated depreciation-delivery truck	42800
	Delivery truck		58000
	(To record disposal of truck)

b) Journal entries :

Date	account and explanation	debit	credit
	Cash	16900
	Accumlated depreciation-delivery truck	42800
	Gain on disposal of delivery truck		1700
	Delivery truck		58000
	(To record disposal of truck)

c) Journal entries :

Date	account and explanation	debit	credit
	Cash	13300
	Accumlated depreciation-delivery truck	42800
	Loss on disposal of delivery truck	1900
	Delivery truck		58000
	(To record disposal of truck)