Business, 04.04.2020 04:34 zahwaahmaf

MoveIt Corporation is the world’s leading express-distribution company. In addition to its 643 aircraft, the company has more than 57,000 ground vehicles that pick up and deliver packages. Assume that MoveIt sold a delivery truck for $26,000. MoveIt had originally purchased the truck for $43,000 and had recorded depreciation for three years. Prepare the journal entry to record the disposal of the truck, assuming that Accumulated Depreciation was (a) $17,000, (b) $12,000, and (c) $19,000. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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Answer from: hellicuh

1. No loss or No Gain

2. Loss = $5,000

3. Gain = $2,000

Explanation:

Requirement 1

If the accumulated depreciation of the machine was $17,000, the journal entry to record the transaction of disposal of machine will be as follows:

December 31 Cash Debit $26,000

Accumulated depreciation Debit $17,000

Machine Credit $43,000

Calculation:

Book value of the machine = Purchase price - Accumulated depreciation = $(43,000 - 17,000) = $26,000

We know, Gain (Loss) on sale of machine = Book value of the machine - Sale price = $(26,000 - 26,000) = $0. As the book value and the disposal value are same, there is no loss and no gain.

Requirement 2

If the accumulated depreciation of the machine was $12,000, the journal entry to record the transaction of disposal of machine will be as follows:

December 31 Cash Debit $26,000

Accumulated depreciation Debit $12,000

Loss on sale of equipment Debit $5,000

Machine Credit $43,000

Calculation:

Book value of the machine = Purchase price - Accumulated depreciation = $(43,000 - 12,000) = $31,000

We know, Loss on sale of machine = Sale price - Book value of the machine = $(31,000 - 26,000) = $5,000. Loss is a debit as it shows as the expense.

Requirement 3

If the accumulated depreciation of the machine was $19,000, the journal entry to record the transaction of disposal of machine will be as follows:

December 31 Cash Debit $26,000

Accumulated depreciation Debit $19,000

Gain on sale of machine Credit $2,000

Machine Credit $43,000

Calculation:

Book value of the machine = Purchase price - Accumulated depreciation = $(43,000 - 19,000) = $24,000

We know, Gain on sale of machine = Sale price - Book value of the machine = $(26,000 - 24,000) = $2,000. Gain is a credit as it shows as the income.

Answer from: Quest

the second one is 3mm

because i just took the test

Answer from: Quest

wheres the chart? so i can answer.

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MoveIt Corporation is the world’s leading express-distribution company. In addition to its 643 aircr...

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