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[The following information applies to the questions displayed below.] MoveIt Corporation is the world’s leading express-distribution...
[The following information applies to the questions displayed below.]
MoveIt Corporation is the world’s leading express-distribution company. In addition to its 643 aircraft, the company has more than 57,000 ground vehicles that pick up and deliver packages. Assume that MoveIt sold a delivery truck for $15,000. MoveIt had originally purchased the truck for $25,000 and had recorded depreciation for three years.
-
Using the following structure, indicate the effects (accounts, amounts, and + for increase and − for decrease) of the disposal of the truck, assuming that Accumulated Depreciation was (a) $10,000, (b) $9,000, and (c) $14,000. (Enter any decreases to Assets, Liabilities, or Stockholders
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Expert Solution
| 1 | Assets | = | Liabilities | + | Stockholder's equity | |||||
| Cash | + | Equipment | + | Accumulated depreciation | ||||||
| a | 15000 | -25000 | 10000 | |||||||
| b. | 15000 | -25000 | 9000 | -1000 | ||||||
| c. | 15000 | -25000 | 14000 | 4000 | ||||||
| a. | Gain/(Loss) on sale | |||||||||
| $ | ||||||||||
| Sale value | 15000 | |||||||||
| Add:Accumulated dep. | 10000 | |||||||||
| 25000 | ||||||||||
| Less: Original cost | 25000 | |||||||||
| Gain/(Loss) on sale | 0 | |||||||||
| b. | Gain/(Loss) on sale | |||||||||
| $ | ||||||||||
| Sale value | 15000 | |||||||||
| Add:Accumulated dep. | 9000 | |||||||||
| 24000 | ||||||||||
| Less: Original cost | 25000 | |||||||||
| Gain/(Loss) on sale | -1000 | |||||||||
| Loss on sale will reduce the stockholder's equity | ||||||||||
| c. | Gain/(Loss) on sale | |||||||||
| $ | ||||||||||
| Sale value | 15000 | |||||||||
| Add:Accumulated dep. | 14000 | |||||||||
| 29000 | ||||||||||
| Less: Original cost | 25000 | |||||||||
| Gain/(Loss) on sale | 4000 | |||||||||
| Gain on sale will increase the stockholder's equity |
ekkarill92 answered 2 years agoRelated Solutions
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