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Question - Lexi Inc. owns and operates a delivery truck that originally cost $57,500. Straight-line depreciation on the truck has been recorded for 2 years, with a $2,500 expected salvage value at the end of its estimated five-year useful life. Depreciation was last recorded at the end of the second year at which time Lexi disposes of the truck.
Required -
1. Compute the book value of the truck on the date of sale.
2. Compute the gain or loss on the sale of the truck if the sales price was $40,000 cash. gain as "+" and a loss as "-".
3. Compute the gain or loss on the sale of the truck if the sales price was $30,000 cash. gain as "+" and a loss as "-".
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