Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on...

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Accounting

Swann Company sold a delivery truck on April 1, 2016. Swann hadacquired the truck on January 1, 2012, for $44,000. At acquisition,Swann had estimated that the truck would have an estimated life of5 years and a residual value of $3,000. At December 31, 2015, thetruck had a book value of $11,200. Required: 1. Prepare anynecessary journal entries to record the sale of the truck, assumingit sold for: a. $10,600 b. $7,600 2. How should the gain or loss ondisposal be reported on the income statement? 3. Assume that Swannuses IFRS and sold the truck for $10,600. In addition, Swann hadpreviously recorded a revaluation surplus related to this machineof $5,000. What journal entries are required to record thesale?
Prepare the necessary journal entries on April 1, 2016 torecord:
1. depreciation expense of thedelivery truck for 2016
2.
the sale of the truck, assuming it sold for $10,600
Prepare the necessary journal entries on April 1, 2016 torecord:
1. depreciation expense of thedelivery truck for 2016
2. the sale of the truck, assumingit sold for $7,600

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SolutionGiven dataCost of truck44000estimated lifeyears 5 yearsResidualvalue3000Book value on Dec312015 11200Calculation of depreciation FormulaDepreciation Cost of truck Residual value estimated life See Answer

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