Question

Exercise 9.20 Disposal of PPE LO6 CHECK FIGURES: b. Gain $1,450; c. Loss $50 sold a food truck on March 1,2017. The accounts showed adjusted balances on February 28, 2017, as follows: Food Truck Accumulated Depreciation, Food Truck $42,000 21,850 Required Record the sale of the food truck assuming the cash proceeds were: a, $20.150 b. $21,600 $19,200 d, $0 (the food truck was scrapped). c.

please full calculation and explanation

Answer 1

	Book Value of food Truck =	Purchase Value - Accumulated Depreciation
	=	$42,000 - $21,850
	=	$                                                                                                 20,150
	Date	General Journal	Debit	Credit
a.	Mar-1-2017	Cash	$ 20,150
		Food Truck		$ 20,150
		(Being sale of Food truck recorded at no profit no loss)
	Date	General Journal	Debit	Credit
b.	Mar-1-2017	Cash	$ 21,600
		Food Truck		$ 20,150
		Profit on sale of Truck ($21,600 - $20,150)		$   1,450
		(Being sale of Food truck recorded at profit)
		Profit on sale of Food Truck	$   1,450
		Profit and loss account		$   1,450
		(Being profit on sale of Food Truck transferred to profit and loss account)
	Date	General Journal	Debit	Credit
c.	Mar-1-2017	Cash	$ 19,200
		Loss on sale of Food Truck ($20,150 - $19,200)	$       950
		Food Truck		$ 20,150
		(Being sale of Food truck recorded at loss)
		Profit and loss account	$       950
		Loss on sale of Truck		$       950
		(Being loss on sale of Food Truck transferred to profit and loss account)
	Date	General Journal	Debit	Credit
d.	Mar-1-2017	Profit and loss account	$ 20,150
		Food Truck		$ 20,150
		(Being Food Truck recorded as scrap at nil value)