Question

Worley Truck Rental uses the group depreciation method for its fleet of trucks. When it retires one of its trucks and receives cash from a salvage company, the carrying value of property, plant, and equipment will be decreased by the

A. original cost of the truck less the cash proceeds.
B. cash proceeds received.
C. original cost of the truck.
D. cash proceeds received and original cost of the truck.

Answer 1

B. cash proceeds received.

Step-by-step explanation:

Worley Truck Rental uses the group depreciation method for its fleet of trucks. When it retires one of its trucks and receives cash from a salvage company, the carrying value of property, plant, and equipment will be decreased by the cash proceeds received.