Question

Macho Taco sold a food truck on March 1, 2017. The accounts showed adjusted balances on...

Macho Taco sold a food truck on March 1, 2017. The accounts showed adjusted balances on February 28, 2017, as follows:

  Food Truck $ 50,000
  Accumulated Depreciation, Food Truck 28,250


Required:
Record the sale of the food truck assuming the cash proceeds were: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. $ 21,750      b. $ 25,600     c. $ 20,000     d. $ 0 (the food truck was scrapped).
Business   Accounting   
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Homework Answers

Answer #1

a) Journal entries

Date account and explanation debit credit
Mar 1 Cash 21750
Accumulated Depreciation, Food Truck 28250
Food truck 50000
(To record sale)

b) Journal entries

Date account and explanation debit credit
Mar 1 Cash 25600
Accumulated Depreciation, Food Truck 28250
Gain on sale of food truck 3850
Food truck 50000
(To record sale)

c) Journal entries

Date account and explanation debit credit
Mar 1 Cash 20000
Accumulated Depreciation, Food Truck 28250
Loss on sale of truck 1750
Food truck 50000
(To record sale)

d) Journal entries

Date account and explanation debit credit
Mar 1 Loss on disposal of truck 21750
Accumulated Depreciation, Food Truck 28250
Food truck 50000
(To record disposal)
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