Plant Asset Essay

Disposal of Plant Assets 1. Discard Plant Assets 2. distribute Plant Assets 3. commuting Plant Assets metamorphose with similar assets win over with dissimilar assets Discard Assets A machine costing $9000 with pile up depreciation of $9000 is discarded on June 5, 2001 instrument 9000 store depreciation 9000 salt away depreciation needs reverse launching commonplace Journal determine level Title and history PR calculate Credit Discard Assets A machine costing $8000 with amass depreciation of $6000 on Dec 31, 2000. It is discarded on July 1, 2001 Machine 8000 hoard depreciation 000 General Journal Date Account Title and bill PR Debit Credit Selling Plant Asset 3 Types of Selling Sell at book value Sell above book value Sell infra book value Sell Plant Asset at Book honour congressman A machine costing $16000 with collect depreciation of $12000 on Dec 31, 2002. It is exchange on March 1, 2003 for currency = $3000 Machine Accumulated depreciation 16000 12000 General Journal Date Account Title and translation PR Debit Credit Sell Plant Asset Above Book Value Example A machine costing $16000 with accumulated depreciation of $12000 on Dec 31, 2002.It is sold on March 1, 2003 for cash = $7000 Machine Accumulated depreciation 16000 12000 General Journal Date Account Title and Explanation PR Debit Credit Sell Plant Asset below Book Value Example A machine costing $16000 with accumulated depreciation of $12000 on Dec 31, 2002. It is sold on March 1, 2003 for cash = $2500 Machine Accumulated depreciation 16000 12000 General Journal Date Account Title and Explanation PR Debit Credit Exchanging Plant Assets Assets Exchange Dissimilar Similar Loss recognized Recognized Gain Recognized Not Recognized Exchange Similar Asset GainExample An old equipment costing $36,000 with accumulated depreciation of $20,000 on Dec 31, 2002. It is exchange on Jan 1, 2003 for new equipment that has blank value =$42,000 by paying to a greater extent cash = $33000 Machine Accumulated depreciation 36,000 20,000 General Journal Date Account Title and Explanation PR Debit Credit Exchange Dissimilar Asset Gain Example An old equipment costing $36,000 with accumulated depreciation of $20,000 on Dec 31, 2002. It is exchanged on Jan 1, 2003 for new equipment that has fair value =$52,000 by paying more cash = $33000 Machine Accumulated depreciation 6,000 20,000 General Journal Date Account Title and Explanation PR Debit Credit Summary ? ? ? ? ? ? ? Cost of plant assets hunk sum purchase Capital expenditure and Revenue expenditure disparagement method Partial year Depreciation Revise estimate of lay aside value and useful life Disposal of plant assets Practice On July 14, 99 company A paid $600,000 cash to acquire a factory that has bring in, land improvement building and machinery. Appraised value ? land = $160,000 ? land improvement = $80,000 ? Building = $320,000 ? Machinery = $240,000 Journalize?