Disposal of Plant Asset

Canyon Company has a used delivery truck that originally cost $28,200. Straight-line depreciation on the truck has been recorded for three years, with a $3,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck.

Required

Prepare journal entries to record: a. Depreciation expense to the date of disposal. b. Sale of the truck for cash at its book value. c. Sale of the truck for $15,500 cash. d. Sale of the truck for $12,500 cash. e. Theft of the truck. Canyon carries no insurance for theft.

Disposal of Plant Asset Canyon Company has a used delivery truck that originally cost $28,200. Straight-line depreciation on the truck has been recorded for three years, with a $3,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck. Required Prepare journal entries to record: a. Depreciation expense to the date of disposal. b. Sale of the truck for cash at its book value. c. Sale of the truck for $15,500 cash. d. Sale of the truck for $12,500 cash. e. Theft of the truck. Canyon carries no insurance for theft. General Journal Description Debit Credit Reference To record depreciation expense for 4 months. Cash To record sale of truck. Cash Truck To record sale of truck. Cash Accumulated Depreciation Truck To record sale of truck. Accumulated Depreciation Truck To record theft of uninsured truck