Disposal of Plant Asset Canyon Company has a used delivery truck that originally
ID: 2517057 • Letter: D
Question
Disposal of Plant Asset Canyon Company has a used delivery truck that originally cost $36,300. 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 $30,200 cash. d. Sale of the truck for $12,000 cash. e. Theft of the truck. Canyon carries no insurance for theftExplanation / Answer
a. By Depreciation a/c dr 1,850
To truck a/c 1,850
b. By cash a/c dr 17,800
To Truck a/c 17,800
c. By cash a/c dr 30,200
To Truck a/c 17,800
To profit on sale of Truck a/c 12,400
d. By cash a/c dr 12,000
By Loss on sale of Truck a/c dr 5,800
To Truck a/c 17,800
e. By loss a/c dr 17,800
To Truck a/c 17,800