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MoveIt Corporation is the world’s leading express-distribution company. In addition to its 643 aircraft, the company...

MoveIt Corporation is the world’s leading express-distribution company. In addition to its 643 aircraft, the company has more than 57,000 ground vehicles that pick up and deliver packages. Assume that MoveIt sold a delivery truck for $8,000. MoveIt had originally purchased the truck for $14,000 and had recorded depreciation for three years.

1. Calculate the amount of gain or loss on disposal, assuming that Accumulated Depreciation was (a) $6,000, (b) $4,000, and (c)$9,000. (Select "None" if there is no Gain or Loss.)

Gain/Loss Amount
a.
b.
c.
Business   Accounting   
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Homework Answers

Answer #1

a.

Carrying value = Cost - Accumulated depreciation

= $14,000 - $6,000

= $8,000

Gain = Sale price - Carrying value

= $8,000 - $8,000

= $0

b.

Carrying value = Cost - Accumulated depreciation

= $14,000 - $4,000

= $10,000

Gain = Sale price - Carrying value

= $8,000 - $10,000

= ($2,000)

c.

Carrying value = Cost - Accumulated depreciation

= $14,000 - $9,000

= $5,000

Gain = Sale price - Carrying value

= $8,000 - $5,000

= $3,000

Gain / Loss Amount
a. No gain / loss $0
b. Loss $2,000
c. Gain $3,000
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