Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1, 2012, for $39,500. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $4,000. At December 31, 2015, the truck had a book value of $11,100.

Required:

1. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:

a.$11,025

b. $7,5252

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 $11,025. In addition, Swann had previously recorded a revaluation surplus related to this machine of $5,000. What journal entries are required to record the sale?

1. Prepare the necessary journal entries on April 1, 2016 to record:

• depreciation expense of the delivery truck for 20162.
• the sale of the truck, assuming it sold for $11,025

GENERAL JOURNAL

DATE ACCOUNT TITLE DEBIT CREDIT

2. Prepare the necessary journal entries on April 1, 2016 to record:

• depreciation expense of the delivery truck for 20162.
• the sale of the truck, assuming it sold for $7,525

GENERAL JOURNAL

DATE ACCOUNT TITLE DEBIT CREDIT

3. Assume that Swann uses IFRS and sold the truck for $11,025. In addition, Swann had previously recorded a revaluation surplus related to this machine of $5,000.

• depreciation expense of the delivery truck for 20162.
• the sale of the truck, assuming it sold for $11,0253.
• other adjustments related to removing the delivery truck from the books.

GENERAL JOURNAL

DATE ACCOUNT TITLE DEBIT CREDIT