A truck that cost $250 000 and had accumulated depreciation of $180 000 was sold for $50 000 cash in June 2020. This transaction will:

Question

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The sale of the truck decreases assets because the truck is removed from the balance sheet, and the cash received is less than the book value ($250,000 - $180,000 = $70,000). The loss on sale ($70,000 - $50,000 = $20,000) decreases profits.

A Truck That Cost $250 000 and Had Accumulated Depreciation