Plant Asset Essay

Disposal of Plant Assets 1. Discard Plant Assets 2. make out Plant Assets 3. Exchange Plant Assets Exchange with similar assets Exchange with dissimilar assets Discard Assets A railroad car costing $9000 with put in derogation of $9000 is discarded on June 5, 2001 work 9000 Accumulated depreciation 9000 Accumulated depreciation needs reverse entry General Journal engagement Account championship and Explanation PR account Credit Discard Assets A apparatus costing $8000 with accumulated depreciation of $6000 on downslope 31, 2000. It is discarded on July 1, 2001 automobile 8000 Accumulated depreciation 000 General Journal Date Account title of respect and Explanation PR calculate Credit cuck overageding Plant Asset 3 Types of Selling Sell at declare hold dear Sell above book value Sell below book value Sell Plant Asset at Book Value Example A cable car costing $16000 with accumulated depreciation of $12000 on Dec 31, 2002. It is sold on March 1, 2003 for cash = $3 000 railcar Accumulated depreciation 16000 12000 General Journal Date Account Title and Explanation PR account Credit Sell Plant Asset Above Book Value Example A auto 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 acknowledge 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 exchanged on Jan 1, 2003 for new equipment that has fair value =$42 ,000 by remunerative more 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 inflation sum purchase Capital expenditure and Revenue expenditure Depreciation method Partial course Depreciation Revise estimate of salvage value and useful life Disposal of plant assets exert On July 14, 99 company A paid $600,000 cash to acquire a factory that has subvert, land improvement building and machinery. Appraised value ? land = $160,000 ? land improvement = $80,000 ? Building = $320,000 ? Machinery = $240,000 Journalize?