Vis-u-tek Company sold a delivery truck on April 1, 2013. Swann had acquired the
ID: 2468969 • Letter: V
Question
Vis-u-tek Company sold a delivery truck on April 1, 2013. Swann had acquired the truck on January 1, 2009, for $41,100. At acquisition, Vis-u-tek had estimated that the truck would have an estimated life of 5 years and a residual value of $5,100. At December 31, 2012, the truck had a book value of $12,300. Vis-u-tek uses the straight-line method.
1a. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for $11,500: For compound entries, if an amount box does not require an entry, leave it blank or enter "0".
1b. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for $9,300: For compound entries, if an amount box does not require an entry, leave it blank or enter "0".
3. Assume that Vis-u-tek uses IFRS and sold the truck for $11,500. In addition, Vis-u-tek had previously recorded a revaluation surplus related to this machine of $4,800. What journal entries are required to record the sale? For compound entries, if an amount box does not require an entry, leave it blank or enter "0".
Explanation / Answer
Depreciation per year = (41,100 – 5,100) / 5 = 7200
1A)
cash
11,500
Accumulated depreciation
28,800
Loss on disposal
800
To Truck
41,100
Cash
9,300
Accumulated depreciation
28,800
Loss on disposal
3,000
To Truck
$41,100
Cash
11,500
Accumulated depreciation
28,800
Loss on disposal
5,600
To Truck
$45,900
Revaluation surplus
4,800
To Retained Earnings
$,800
cash
11,500
Accumulated depreciation
28,800
Loss on disposal
800
To Truck
41,100
Cash
9,300
Accumulated depreciation
28,800
Loss on disposal
3,000
To Truck
$41,100
Cash
11,500
Accumulated depreciation
28,800
Loss on disposal
5,600
To Truck
$45,900
Revaluation surplus
4,800
To Retained Earnings
$,800
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