Scribd Logo
Upload

Welcome to Scribd!

  • 66 views

    Accounting - 8360446

    Uploaded by

    Allur Sai Vijay Kumar
    The document discusses accounting for the purchase of a new bus and disposal of an old bus. It states that the new bus costs $65,000 but with a $10,000 trade-in value for the old bus, the cash requirement is $55,000. It then provides that the old bus originally cost $52,000 but had $34,000 in accumulated depreciation, giving it a net book value of $18,000. Since it was traded in for $10,000, this resulted in an $8,000 loss, which would be reported in the other income/expense section of the income statement.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content

    You might also like

    Accounting - 8360446

    Uploaded by

    Allur Sai Vijay Kumar
    66 views1 page
    The document discusses accounting for the purchase of a new bus and disposal of an old bus. It states that the new bus costs $65,000 but with a $10,000 trade-in value for the old bus, the cash requirement is $55,000. It then provides that the old bus originally cost $52,000 but had $34,000 in accumulated depreciation, giving it a net book value of $18,000. Since it was traded in for $10,000, this resulted in an $8,000 loss, which would be reported in the other income/expense section of the income statement.

    Original Description:

    Original Title

    Accounting - 8360446.doc

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses accounting for the purchase of a new bus and disposal of an old bus. It states that the new bus costs $65,000 but with a $10,000 trade-in value for the old bus, the cash requirement is $55,000. It then provides that the old bus originally cost $52,000 but had $34,000 in accumulated depreciation, giving it a net book value of $18,000. Since it was traded in for $10,000, this resulted in an $8,000 loss, which would be reported in the other income/expense section of the income statement.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    66 views1 page

    Accounting - 8360446

    Uploaded by

    Allur Sai Vijay Kumar
    The document discusses accounting for the purchase of a new bus and disposal of an old bus. It states that the new bus costs $65,000 but with a $10,000 trade-in value for the old bus, the cash requirement is $55,000. It then provides that the old bus originally cost $52,000 but had $34,000 in accumulated depreciation, giving it a net book value of $18,000. Since it was traded in for $10,000, this resulted in an $8,000 loss, which would be reported in the other income/expense section of the income statement.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 1

    SOLUTION:

    A. $65,000 price for new bus, less $10,000 trade-in value on old = $55,000 cash requirement

    B. $52,000 original price for old bus, less $34,000 accumulated depreciation = $18,000 Net
    Book Value. $10,000 trade in value, less $18,000 Net Book Value = $8,000 loss on disposal of
    the bus

    C. The loss of $8,000 would be reported in the Other Income/Expense section of the income
    statement. That section is typically reported below cost of sales, below operating expenses, and
    below sales and general administration expenses, just before income tax expenses are reported.

    You might also like