会计学原理英文课件Chapter_10PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLES教学教材.pptVIP

* If the amount of cash received is greater than the book value of the asset (cost less accumulated depreciation), a gain is associated with the disposal.If the cash received is less than the book value of the asset, a loss will be recorded. When the amount of cash is exactly equal to the book value of the asset, there will be no gain or loss in connection with the disposal. Now let’s look at a specific example of disposal of a plant asset. * Equipment costing $8,000, with accumulated depreciation of $6,000 on December 31st of the previous year was discarded on July 1st of the current year. The company is depreciating the equipment using the straight-line method over eight years with zero salvage value. The first step in the accounting process is to bring the depreciation up to the date of discarding. Annual depreciation is $1,000, so one-half year depreciation will be $500. The proper journal entry is to debit Depreciation Expense and credit Accumulated Depreciation – Equipment for $500. Recording cashreceived (debit)or paid (credit). Removing accumulateddepreciation (debit). Update depreciation to the date of disposal. Journalize disposal by: Removing the asset cost (credit). Recording again (credit) or loss (debit). DISPOSALS OF PLANT ASSETS P4 Update depreciation to the date of disposal. Journalize disposal by: If Cash BV, record a gain (credit). If Cash BV, record a loss (debit). If Cash = BV, no gain or loss. DISCARDING PLANT ASSETS Recording cashreceived (debit)or paid (credit). Removing accumulateddepreciation (debit). Removing the asset cost (credit). Recording again (credit) or loss (debit). P4 Equipment costing $8,000, with accumulated depreciation of $6,000 on December 31st of the previous year was discarded on July 1st of the current year. The company is depreciating the equipment using the straight-line method over eight years with zero salvage value. DISCARDING PLANT ASSETS Update depreciation to July 1st: ($8,000 ÷