Question

On December 29, 2015, Patel Products, Inc., sells a delivery van that cost $20,000. After recording the entry to bring the accumulated depreciation up-to-date, the delivery van had accumulated depreciation of $18,000. Patel received $2,000 cash from the purchaser of the delivery van. Complete the necessary journal entry to record the sale by selecting the account names and dollar amounts from the drop-down menus.

Answer 1

here is no gain or loss recorded because Carrying value = $2000 and cash received is also $2000

Step-by-step explanation:

given data

sells delivery van cost $20,000

accumulated depreciation = $18,000

Patel received = $2,000

solution

as we know that

van cost = cr 20000

and accumulated depreciation Dr $18,000

Patel received Dr $2,000

so we can say that Carrying value will be

Carrying value = 20000 - 18000

Carrying value = $2000

and cash received is also $2000

so here is no gain or loss recorded