A company sold a delivery truck for $22,000 cash.The truck costs $45,800 and had accumulated depreciation of $32,000 as of the date of sale.The entry to record the sale would include:

Question

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The company sold the delivery truck for $22,000 cash, which is less than the original cost of $45,800. Additionally, the truck had accumulated depreciation of $32,000 as of the date of sale.

To record the sale, the company would need to do the following:
- Debit Cash for $22,000 (as this is the amount received from the sale)
- Debit Accumulated Depreciation for $32,000 (as this is the total amount of depreciation recognized for the truck up to the date of sale)
- Credit Delivery Truck for $45,800 (as this is the original cost of the truck)

The credit to Delivery Truck account ($45,800) is greater than the debit to Accumulated Depreciation account ($32,000) and the Cash received ($22,000), resulting in a gain for the company.

The calculation for the gain is as follows:
Sale Price - Book Value
$22,000 - ($45,800 - $32,000)
$22,000 - $13,800
= $8,200 gain.

Therefore, the correct answer is C (a gain for $8,200).

A Company Sold a Delivery Truck for $22,000 Cash