Question

A trucking company sold its fleet of trucks for $55,000. The trucks originally cost $1,410,000 and had Accumulated Depreciation of $1,269,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?

Answer 1

Answer:

Loss on disposal = $86,000

Explanation:

Given the following information about the fleet of trucks sold;

Income from disposal = $55,000

Historical cost of assets = $1,410,000

Accumulated Depreciation = $1,269,000

Calculate the net book value

Net book value = Historical cost of assets - Accumulated Depreciation

                          = $1,410,000 - $1,269,000

                          = $141,000

Gain or (loss) = $55,000 - $141,000

                      = $ (86,000)

Loss on disposal $86,000