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Swann Company sold a delivery truck on April 1, 2019. Swann had acquired the truck on January 1, 2015, for $45,500. At acquisition, Swann had estimated that the truck would have an estimated life of 5 years and a residual value of $3,000. Swann uses the straight-line method of depreciation. At December 31, 2018, the truck had a book value of $11,500.

Required:

1.	Prepare any necessary journal entries to record the sale of the truck, assuming it sold for: a. $11,125 b. $7,525
2.	How should the gain or loss on disposal be reported on the income statement?
3.	Assume that Swann uses IFRS and sold the truck for $11,125. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,500. What journal entries are required to record the sale?

1a. Prepare the necessary journal entries on April 1, 2019 to record:

1.	Depreciation expense of the delivery truck for 2019
2.	The sale of the truck, assuming it sold for $11,125

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

1b. Prepare the necessary journal entries on April 1, 2019 to record:

1.	Depreciation expense of the delivery truck for 2019
2.	The sale of the truck, assuming it sold for $7,525

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

3. Assume that Swann uses IFRS and sold the truck for $11,125. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,500.

1.	Depreciation expense of the delivery truck for 2019
2.	The sale of the truck, assuming it sold for $11,125
3.	Other adjustments related to removing the delivery truck from the books

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8

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