On January 1, 2007, Lasche Auto Sales and Service purchased a vehicle for use in the business at a cost of $44,000. The vehicle has a 4-year useful life with an expected residual value of $4,000. The company has a December 31 year-end and uses straight-line depreciation for all capital assets. On July 1, 2009, the company sold the vehicle for proceeds of $22,000. The journal entry to record the sale of the vehicle would: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a debit loss on sale of assets, $3,000 b с d credit vehicle, $19,000 debit accumulated depreciation, $25,000 credit gain on sale of assets, $2,000

On January 1, 2007, Lasche Auto Sales and Service purchased a vehicle for use in the business at a cost of $44,000. The vehicle has a 4-year useful life with an expected residual value of $4,000. The company has a December 31 year-end and uses straight-line depreciation for all capital assets. On July 1, 2009, the company sold the vehicle for proceeds of $22,000. The journal entry to record the sale of the vehicle would: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a debit loss on sale of assets, $3,000 b с d credit vehicle, $19,000 debit accumulated depreciation, $25,000 credit gain on sale of assets, $2,000

Name: On January 1, 2007, Lasche Auto Sales and Service purchased a vehicle
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Description: On January 1, 2007, Lasche Auto Sales and Service purchased a vehicle for use in the business at a cost of $44,000. The vehicle has a 4-yearuseful life with an expected residual value of $4,000. The company has a December 31 year-end and uses straig

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

On January 1, 2007, Lasche Auto Sales and Service purchased a vehicle for use in the business at a cost of $44,000. The vehicle has a 4-year
useful life with an expected residual value of $4,000. The company has a December 31 year-end and uses straight-line depreciation for all
capital assets. On July 1, 2009, the company sold the vehicle for proceeds of $22,000.
The journal entry to record the sale of the vehicle would:
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
с
d
debit loss on sale of assets, $3,000
credit vehicle, $19,000
debit accumulated depreciation, $25,000
credit gain on sale of assets, $2,000

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Step 1: Accumulated depreciation explained as follows -

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Step 2: Depreciation per year is calculated as follows -

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Step 3: Accumulated Depreciation for June 30 is calculated as follows -

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Step 4: Journal Entry recorded for sale of vehicle -

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