Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, 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. Swann uses the straight-line method of depreciation. At December 31, 2018, the truck had a book value of $12,400. Required: 1. Propare any necessary Journal entries to record the sale of the truck, assuming it sold for: a. $12,000 b. $9,000 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? CHART OF ACCOUNTS 201 Swann Company General Ledger ASSETS REVENUE 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 411 Sales Revenue 882 Gain on Disposal of Property, Plant, and Equipment EXPENSES 500 Cost of Goods Sold 186 Trucks 198 Accumulated Depreciation 511 Insurance Expense 512 Little France Check My Work Previous that Chart of Accounts 198 Accumulated Depreciation 201 LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 531 Depreciation Expense 532 Bad Debt Expense 540 Interest Expense 559 midcellaneous Expenses 892 Loss on Disposal of Property, Plant, and Equipment EQUITY 311 Common Stock 331 Retained Earnings 335 Revaluation Surplus instructions General Journal Shaded cells have feedback PAGE 9 GENERAL JOURNAL Score: 24/75 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 Cash 2 Accumulated Depreciation Depreciation Expense Trucks 5 6 Previous Nex Check My Work All work saved Email Instructor Save and Exit Submit Assignment for G Disposal of Property, Plant, and Equipment Instructions Chart of Accounts General Journal Analysis Instructions General Journal 16. Prepare the necessary journal entries on April 1, 2019 to record: Shaded cells have feed 1. Depreciation expense of the delivery truck for 2019 2. The sale of the truck, assuming it sold for $9,000 General Journal Instructions Question not attempted. PAGE 9 GENERAL JOURNAL Score: 0/75 PAGE 9 GENERAL JOURNAL Score: 0/75 DATE ACCOUNT TITLE POST. REK DEBIT CREDIT 1 3 4 5 6 Check My Work Dravi Nave General Journal Shaded cells have feedback 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 1. Depreciation expense of the delivery truck for 2019 2. The sale of the truck, assuming it sold for $12,000 3. Other adjustments related to removing the delivery truck from the books General Journal Instructions Instructions General Journal GENERAL JOURNAL Shaded cells have feedback Score: 0/100 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 6 7
