Using your calculations from the Capital Assets Part B, question 6, what is the Truck account Credit journal entry recorded for the sale of the truck?

Question

BlackTom AI · Accepted Answer

The prompt asks us to determine the Truck account credit amount for the journal entry recording the sale of the truck, referencing calculations from a prior problem. Since the provided data includes no answer options, we cannot compare alternative choices; we can instead reason through the standard accounting treatment.

First, recall the typical journal entry when disposing of a fixed asset like a truck: you remove the asset’s cost from the books, remove the accumulated depreciation up to the date of sale, recognize any cash or receivable received, and record a gain or loss depending on the difference between the sale proceeds and the net book value (cost minus accumulated depreciation).

If the sale proceeds were $30,000, and the question specifically asks for the Truck account credit, the credit to Truck would reflect removing the asset’s historical cost from the books. In a standard sale transaction, the Truck account (the asset’s cost) is credited for the original cost of the truck, while the corresponding debit entries would include Cash (or Accounts Receivable) for the sale proceeds and possibly Debit to Accumulated Depreciation and Debit to Loss on Sale or Credit to Gain on Sale, depending on whether a gain or loss occurs.

Why this matters: the Truck (asset) account is a balance sheet account that originally carries the truck’s historical cost. Upon sale, you reduce this cost by crediting the Truck account by the asset’s historical cost. If the vehicle’s cost was $30,000, then the Truck account credit would be $30,000, provided the sale proceeds align with or differ from this amount and you have the appropriate accompanying entries for depreciation and any gain or loss.

Important caveat: without the actual prior calculations (the book value, accumulated depreciation, and any resulting gain or loss), we cannot confirm whether the $30,000 represents the exact credit in every component of the journal entry. If the truck’s original cost differed from $30,000, the Truck credit would equal that original cost, not the sale price. Additionally, the presence of depreciation affects whether a separate gain or loss is recorded and how the other debits are allocated.

In summary, the Truck account credit entry for disposing of the truck is typically equal to the truck’s original cost. If your prior calculations indicate the truck’s cost was $30,000, then crediting Truck for $30,000 is appropriate, while other parts of the journal entry would adjust for cash received and any depreciation and gain/loss effects. If the cost differed, the credit would equal that replacement value instead, and the accompanying entries would reflect the net book value and the sale outcome.

BBK99E2 - Basic Bookkeeping Level 2 Part 2 - Online Exam

Using your calculations from the Capital Assets Part B, question 6, what is the Truck account Credit journal entry recorded for the sale of the truck?

View Explanation

Log in for full answers

Similar Questions

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

A company sells a plant asset that originally cost $336000 for $93000 on December 31, 2025. The accumulated depreciation account had a balance of $168000 after the current year's depreciation of $28000 had been recorded. The company should recognize a

Concerning salvage value when assets are sold, letting: P = purchase price S: salvage value B: residual book value, When S < P: A. If S = B [ Select ] B. If S > B [ Select ] C. If S < B [ Select ]

Concerning salvage value when assets are sold, letting: P = purchase price S: salvage value B: residual book value, When S < P: A. If S = B No tax adjustments are required. B. If S > B There is recaptured depreciation. C. If S < B There is a terminal loss.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler