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Fast Delivery is the world’s largest express transportation company. In addition to the world’s largest fleet of all-cargo aircraft, the company has more than 654 aircraft and 52,000 vehicles and trailers that pick up and deliver packages. Assume that Fast Delivery sold a delivery truck that had been used in the business for three years. The records of the company reflected the following:

Delivery truck cost $ 42,000
Accumulated depreciation 26,800

Required:

1. Prepare the journal entry for the disposal of the truck, assuming that the truck sold for: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. $15,200 cash
b. $16,500 cash
c. $14,000 cash

Respuesta :

Answer and Explanation:

The journal entries are shown below:              

a. Cash   $15,200  

   Accumulate depreciation $26,800  

               To Delivery truck   $42,000

(Being the disposal of the truck is recorded)

b. Cash   $16,500  

Accumulate depreciation $26,800  

              To Delivery truck   $42,000  

              To Gain on sale   $1,300

(Being the disposal of the truck is recorded)

c. Cash   $14,000  

Accumulate depreciation $26,800  

loss on sale  $1,200  

       To Delivery truck   42,000

(Being the disposal of the truck is recorded)

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