A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of 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 Truck account for $3,000.
D) credit to Accumulated depreciation for $9,000.

Question

Quizplus · Accepted Answer

The truck would have a carrying amount of $3,000. Therefore, the difference between the carrying amount and the sales proceeds would be recorded as a loss on disposal.

A Truck That Cost $12,000 and on Which $9,000 of Accumulated