A Truck Costing $56,000 Has Accumulated Depreciation of $50,000

question 109

Multiple Choice

A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $700. The journal entry to record this transaction is to:

• A)debit Cash for $700, debit Truck for $50,000, debit Loss on Disposal for $5,300 and credit Accumulated Depreciation - Truck for $56,000.
• B)debit Cash for $700, debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal for $5,300 and credit Truck for $56,000.
• C)debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal $6,000, and credit Truck for $56,000.
• D)debit Cash for $700, debit Loss on Disposal for $55,300 and credit Truck for $56,000.

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Definitions:

Optimum Point

The most advantageous position or condition that can be achieved in a given circumstance or under certain parameters.

Frozen Yogurt

A dessert made from yogurt and sometimes other dairy products that is frozen and has a taste and texture similar to ice cream.

Indifference Map

A graphical representation of different bundles of goods between which a consumer is indifferent.

Marginal Rate of Substitution

The pace at which a consumer is capable of sacrificing some portion of one item to obtain a different item, without altering their overall happiness.