怀尔德《会计学原理》Chapter-10.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. * After depreciation is brought up-to-date, the balance in the accumulated depreciation account is $6,500. Next, we record the discarding of the equipment with a debit to Accumulated Depreciation – Equipment for $6,500, a debit to Loss on Disposal of Equipment for $1,500, and a credit to the Equipment account for cost of $8,000. The loss is calculated as the difference between the cost of the asset and its accumulated depreciation at the date of disposal. * Part I On March 31st, BTO sells equipment that originally cost $16,000 and has accumulated depreciation of $12,000 at December 31st of the prior calendar year-end. Annual depreciation on this equipment is $4,000 using straight-line depreciation. The equipment is sold for $2,500 cash. The first step in the accounting process it to bring the depreciation up to the date of the sale. Three month’s depreciation amounts for $1,000, so we will debit Depreciation Expense and credit Accumulated Depreciation – Equipment for $1,000.