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Canyon Company has a used delivery truck that originally cost $24,500. Straight-line depreciation on the truck has been recorded for three years, with a $2,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck. Required Prepare journal entries to record: a. Depreciation expense to the date of disposal. b. Sale of the truck for cash at its book value. c. Sale of the truck for $14,000 cash. d. Sale of the truck for $11,000 cash. e. Theft of the truck. Canyon carries no insurance for theft.

Canyon Company has a used delivery truck that originally cost $24,500. Straight-line depreciation on the truck has been recorded for three years, with a $2,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck. Required Prepare journal entries to record: a. Depreciation expense to the date of disposal. b. Sale of the truck for cash at its book value. c. Sale of the truck for $14,000 cash. d. Sale of the truck for $11,000 cash. e. Theft of the truck. Canyon carries no insurance for theft.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Canyon Company has a used delivery truck that originally cost $24,500. Straight-line depreciation on the truck has been recorded for three years, with a $2,000 expected salvage value at the end of its estimated six-year useful life. The last depreciation entry was made at the end of the third year. Four months into the fourth year, Canyon disposes of the truck.

Required

Prepare journal entries to record:
a. Depreciation expense to the date of disposal.
b. Sale of the truck for cash at its book value.
c. Sale of the truck for $14,000 cash.
d. Sale of the truck for $11,000 cash.
e. Theft of the truck. Canyon carries no insurance for theft.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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