A company sold a delivery truck for $18,000 cash. The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale. The entry to record the sale would include:

Question

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The company received $18,000 cash for selling the truck, which is higher than the net book value of the truck (cost of $47,500 - accumulated depreciation of $36,000 = $11,500). Therefore, the company has a gain on the sale of the truck. The entry to record the sale would include a debit to cash for $18,000, a credit to delivery truck for $47,500, a credit to accumulated depreciation for $36,000, and a credit to gain on sale of truck for $6,500 ($18,000 - $11,500).

A Company Sold a Delivery Truck for $18,000 Cash