Federal Express 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 669 aircraft and 53,000 vehicles and trailers that pick up and deliver packages. Assume that Federal Express sold a small delivery truck that had been used in the business for three years. The records of the company reflected the following:
Delivery truck cost ........... $28,000
Accumulated depreciation ........ 23,000

Required:
1. Give the journal entry for the disposal of the truck, assuming that the truck sold for
a. $5,000 cash
b. $5,600 cash
c. $4,600 cash
2. Based on the three preceding situations, explain the effects of the disposal of an asset.