zetablue1
Oct 12, 2010, 02:30 PM
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2004. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Instructions: Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ingles Company uses straight-line depreciation. (Assume
depreciation is up to date as of December 31, 2007.)
Dec 31 Depreciation Expense Debit $6000
Accumulated Depreciation - Delivery truck Credit $6000
(To record depreciation to date of retirement)
Accumulated Depreciation Debit $30,000
Loss on Disposal Debit $9000
Equipment - Delivery truck Credit $39,000
(To record retirement of delivery equipment at a loss)
I am sure the 3000 difference disposal amount and depreciation amount has to do with the salvage value but I don't understand what to do with the salvage value. Any help would be very much appreciated.
depreciation is up to date as of December 31, 2007.)
Dec 31 Depreciation Expense Debit $6000
Accumulated Depreciation - Delivery truck Credit $6000
(To record depreciation to date of retirement)
Accumulated Depreciation Debit $30,000
Loss on Disposal Debit $9000
Equipment - Delivery truck Credit $39,000
(To record retirement of delivery equipment at a loss)
I am sure the 3000 difference disposal amount and depreciation amount has to do with the salvage value but I don't understand what to do with the salvage value. Any help would be very much appreciated.