FedEx is the world’s leading express-distribution company. In addition to the world’s largest fleet of all-cargo aircraft, the company has more than 688 aircraft and 50,000 vehicles and trailers that pick up and deliver packages. Assume that FedEx sold a delivery truck that had been used in the business for three years. The records of the company reflected the following:
Delivery truck cost ..... $35,000
Accumulated depreciation . 23,000
1. Give the journal entry for the disposal of the truck, assuming that the truck sold for
a. $12,000 cash
b. $12,400 cash
c. $11,500 cash
2. Based on the three preceding situations, explain the effects of the disposal of an asset.