Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1,...

Question:

Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1, 2012, for $39,500. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $3,000. At December 31, 2015, the truck had a book value of $10,300.

1) Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:

a) $10,125

b) $6,725

2) How should the gain or loss on disposal be reported on the income statement?

3) Assume that Swann uses IFRS and sold the truck for $10,125. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,000. What journal entries are required to record the sale?

Journal Entry :

Journal entry is the method to record the transaction in the books of accounts, this journal entry used for the posting balancing and preparation of balance sheet.

Answer and Explanation: 1

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Journal Entry :

-1 Calculation of Depreciation
Particulars Amount
Annual Depreciation of...

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Journal Entries and Trial Balance in Accounting

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Chapter 3 / Lesson 10
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Discover the meaning of a journal entry and a trial balance, types of journal entries, how a general ledger differs from a trial balance, and some examples.


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