How is the disposition of a long-term asset like land or equipment or a building recorded in the General Journal
- How is the disposition of a long-term asset like land or equipment or a building recorded in the General Journal?
- What is the function of these entries (meaning, what do the accounts that are affected by the entries communicate to readers of the financial statements)?
- Prepare journal entries to record the following:1. Gomez Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received.
2. Assume the same information as (a), except that accumulated depreciation, is $39,000, instead of $41,000, on the delivery equipment.
DQ# 2Jacobs Company incurs the following expenditures in purchasing a truck: cash price$30,000, accident insurance $2,000, sales taxes $1,500, motor vehicle license $100, and painting and lettering $400.
- Identify each cost as either a capital expenditure or a revenue expenditure and discuss why each choice was made.
- What is the cost of the truck? (show how you arrived at this amount)
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Disposition of a long-term asset may result to a gain or a loss. In case of a loss on the sale of equipment of building, the following shows the recording of the transactions…………..
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