Assume that a company sold a delivery van that had been

Question

Assume that a company sold a delivery van that had been used in the business for three years. Records of the company related to the van reflect the following:

 

                                Delivery van cost                                        $42,500

                                Accumulated Depreciation                            25,200

 

Required:

1. Prepare the required journal entry to record disposal of the van, assuming the following sales amounts for cash:
   1. $17,300
   2. $20,500
   3. $15,800
2. Based on the situation above, explain the effects of the disposal of an asset on the company's financial statements.