A truck costing $12,000,which has Accumulated Depreciation of $9,000,was sold for $2,000 cash.The entry to record this event would include a:
A)gain of $1,000.
B)loss of $1,000.
C)credit to the Vehicles account for $3,000.
D)credit to Accumulated Depreciation for $9,000.

Question

Quizplus · Accepted Answer

Gain (loss)on disposal = Proceeds from sale − Book value at time of sale
Gain (loss)on disposal = Proceeds from sale − (Cost − Accumulated depreciation at time of sale)
= $2,000 − ($12,000 − $9,000)= ($1,000)
Debit Cash $2,000,debit Accumulated Depreciation $9,000,debit Loss on Disposal of PPE $1,000,credit Vehicles $12,000

A Truck Costing $12,000,which Has Accumulated Depreciation of $9,000,was Sold