Asked by Malusi Pakade on Apr 25, 2024
On April 1 of the current year,a company disposed of a truck that had cost $20,000.The truck had a salvage value of $2,000,and a useful life of 5 years.The accounting records showed accumulated depreciation for this truck of $8,100 as of April 1 of the current year.The asset was discarded after an accident,and $10,500 cash was received from an insurance claim.Prepare the journal entry to record the disposal of the truck.
Accumulated Depreciation
The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.
Salvage Value
The calculated residual valuation of an asset at the end of its service life.
Insurance Claim
A formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event.
- Ascertain the financial outcome, either positive or negative, upon the relinquishment of fixed assets.
- Draft entries in the general journal to account for transactions related to plant assets.
Learning Objectives
- Ascertain the financial outcome, either positive or negative, upon the relinquishment of fixed assets.
- Draft entries in the general journal to account for transactions related to plant assets.
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