Craig Inc.purchased a truck on January 1,2017 for $40,000.The truck had an estimated life of six years and an estimated salvage value of $4,000.Craig uses the straight-line method to depreciate the asset.On July 1,2019,the truck was sold for $14,000 cash.
A. Determine the effect on the accounting equation up on recording the depreciation for 2017 .

B. Show how the gain or loss on the sale of the asset would be reported on Craig Inc.'s income statement.

Question

Craig Inc.purchased a truck on January 1,2017 for $40,000.The truck had an estimated life of six years and an estimated salvage value of $4,000.Craig uses the straight-line method to depreciate the asset.On July 1,2019,the truck was sold for $14,000 cash.
 A. Determine the effect on the accounting equation up on recording the depreciation for 2017 .

B. Show how the gain or loss on the sale of the asset would be reported on Craig Inc.'s income statement.

Quizplus · Accepted Answer

The Answer of Craig Inc.purchased a truck on January 1,2017 for $40,000.The truck had an estimated life of six years and an estimated salvage value of $4,000.Craig uses the straight-line method to depreciate the asset.On July 1,2019,the truck was sold for $14,000 cash.
 A. Determine the effect on the accounting equation up on recording the depreciation for 2017 .

B. Show how the gain or loss on the sale of the asset would be reported on Craig Inc.'s income statement.

Craig IncPurchased a Truck on January 1,2017 for $40,000