Perfect Auto Rentals sold one of its cars on January 1, 2009. Perfect had acquired the car
Question:
Perfect Auto Rentals sold one of its cars on January 1, 2009. Perfect had acquired the car on January 1, 2007, for $13,500. At acquisition Perfect assumed that the car would have an estimated life of three years and a residual value of $3,000. Assume that Perfect has recorded straight-line depreciation expense for 2007 and 2008.
Required:
1. Prepare the journal entry to record the sale of the car assuming the car sold for:
a. $6,500 cash
b. $4,000 cash
c. $7,000 cash
2. How should the gain or loss on the disposition (if any) be reported on the income statement?
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Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-0324787351
1st Edition
Authors: Rich Jones, Mowen, Hansen, Heitger
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