What is the correct journal entry for the following transaction?A firm sells a car for $40 cash. The cost of the car is $30 and it has accumulated depreciation of $20.The firm is a business consulting firm, and the car is therefore classified as property, plant & equipment. AssetsCash +40PP&E (net) -30AssetsCash +40PP&E (net) -10AssetsCash +40Inventory -30AssetsCash +40PP&E (net) -10LiabilitiesLiabilitiesLiabilitiesLiabilitiesOwner's EquityGain +10Owner's EquityLoss -30Owner's EquityRevenue +40COGS -30Owner's EquityGain +30

Cash is an current asset of the company. PP&E is non- current asset of the company. Net property…

What is the correct journal entry for the following transaction? A firm sells a car for $40 cash. The cost of the car is $30 and it has accumulated depreciation of $20. The firm is a business consulting firm, and the car is therefore classified as property, plant & equipment.

What is the correct journal entry for the following transaction? A firm sells a car for $40 cash. The cost of the car is $30 and it has accumulated depreciation of $20. The firm is a business consulting firm, and the car is therefore classified as property, plant & equipment.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 5CE

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Question

What is the correct journal entry for the following transaction?

A firm sells a car for $40 cash. The cost of the car is $30 and it has accumulated depreciation of $20.

The firm is a business consulting firm, and the car is therefore classified as property, plant & equipment.

Assets
Cash +40
PP&E (net) -30
Assets
Cash +40
PP&E (net) -10
Assets
Cash +40
Inventory -30
Assets
Cash +40
PP&E (net) -10
Liabilities
Liabilities
Liabilities
Liabilities
Owner's Equity
Gain +10
Owner's Equity
Loss -30
Owner's Equity
Revenue +40
COGS -30
Owner's Equity
Gain +30

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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