A truck costing $12,000,on which $9,000 of accumulated depreciation has been recorded was sold for $2,000 cash.The entry to record this event would include a:
A)gain of $1,000.
B)loss of $1,000.
C)credit to the Truck account for $3,000.
D)credit to Accumulated Depreciation for $9,000.

Question

Quizplus · Accepted Answer

The truck was sold for $2,000, but its original cost was $12,000 and $9,000 worth of depreciation had been accumulated.

$12,000 (original cost) - $9,000 (accumulated depreciation) = $3,000 (book value)

Since the truck was sold for $2,000, it resulted in a loss for the company. The loss would be calculated as follows:

$2,000 (selling price) - $3,000 (book value) = -$1,000 (loss)

Therefore, the entry to record this event would include a loss of $1,000.

A Truck Costing $12,000,on Which $9,000 of Accumulated Depreciation Has