Question
Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1, 2012, for $42,000. At acquisition, Swann had
Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1, 2012, for $42,000. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $5,000. At December 31, 2015, the truck had a book value of $12,400.
Required:
1. | Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:
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2. | How should the gain or loss on disposal be reported on the income statement? | ||||
3. | Assume that Swann uses IFRS and sold the truck for $12,000. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,000. What journal entries are required to record the sale? |
Prepare the necessary journal entries on April 1, 2016 to record:
1. | depreciation expense of the delivery truck for 2016 |
2. | the sale of the truck, assuming it sold for $12,000 |
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GENERAL JOURNAL
DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
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Prepare the necessary journal entries on April 1, 2016 to record:
1. | depreciation expense of the delivery truck for 2016 |
2. | the sale of the truck, assuming it sold for $9,000 |
PAGE 9
GENERAL JOURNAL
DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
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1 |
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2 |
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Assume that Swann uses IFRS and sold the truck for $12,000. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,000.
1. | depreciation expense of the delivery truck for 2016 |
2. | the sale of the truck, assuming it sold for $12,000 |
3. | other adjustments related to removing the delivery truck from the books |
PAGE 9
GENERAL JOURNAL
DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
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1 |
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2 |
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3 |
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4 |
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5 |
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8 |
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