Recording the Disposal of an Asset at Three Different Sale Prices FedEx is the world’s leading express distribution company. In addition to the world’s largest fleet of allcargo aircraft, the company has more than 654 aircraft and 51,000 vehicles and trailers that pick up and deliver packages. Assume that FedEx 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 |
$38,000 |
|
Accumulated depreciation |
23,000 |
Required:
1. Give the journal entry for the disposal of the truck, assuming that the truck sold for
a. $15,000 cash
b. $15,600 cash
c. $14,600 cash
2. Based on the three preceding situations, explain the effects of the disposal of an asset.