Disposal of Property, Plant, and Equipment Swann Company sold a delivery truck on April 1, 2016. Swann had acquired the truck on January 1, 2012, for $42,000. At acquisition, SWann had estimated that the truck would have an estimated life of 5 years and a residual value of $5,000. At December 31, 2015, the truck had a book value of$12,400.
Required:
1. Prepare any necessary journal entries to record the sale of the truck, assuming it sold for:
a. $12,000
b. $9,000
2. How should the gain or loss on disposal be reported on the income statement?
3. Assume that Swann uses [FRS and sold the truck for $12,000. In addition, Swann had previously recorded a revaluation surplus related to this machine of $4,000. What journal entries are required to record the sale?