Question

A trucking company sold its fleet of trucks for $56,800. The trucks originally cost $1,496,000 and had Accumulated Depreciation of $1,287,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?

Answer 1

loss on disposal =$152,200

Step-by-step explanation:

The gains on disposal is the the difference between the net sales proceeds on disposal and the carrying value of the assets as the date of disposal.

The carrying value = Cost of the assets - accumulated depreciation to date

Carrying value = $1,496,000- $1,287,00

=209,000

Loss on disposal = $56,800 - $ 209,000 = -152,200

Answer 2

the trucking company recorded a loss on disposal of $152,200 when it sold the fleet of trucks.

Step-by-step explanation:

Open the Truck Disposal T-Account as Follows:

Debits :

Cost $1,496,000

Totals $1,496,000

Credits:

Cash Receipt $56,800

Accumulated Depreciation $1,287,000

Profit and Loss (Balancing figure) $152,200

Totals $1,496,000

Therefore, there was a loss on disposal of $152,200