On January 1, 2017, Alexis Company purchased a delivery truck for $60,000. They estimated the useful life of the truck to be 6 years, and the salvage value to be $12,000. On July 1, 2022, they sold the truck for a loss of $1,200.
Assuming the company uses straight line depreciation, calculate the selling price of the truck.

Question

Quizplus · Accepted Answer

Accumulated depreciation = $60,000 - $12,000 / 6 = $8,000 x 5.5 years = $44,000
The journal entry to record the sale is:
To record the sale of delivery truck.
 11ee7640_e1cc_4905_90da_ebf93817dbc9_TBCB1007_00 X = $60,000 - $44,000 - $1,200
X = $14,800 Cash/Selling price

On January 1, 2017, Alexis Company Purchased a Delivery Truck