會(huì)計(jì)學(xué)清華大學(xué)已有固定資產(chǎn)與折舊學(xué)生大軟件站課件

Chapter9PlantAssetsandDepreciationChapter9PlantAssetsandDeprPlantAssetsLong-livedassetsacquiredforuseinbusinessoperations.Similartolong-termprepaidexpensesThecostofplantassetsistheadvancepurchaseofservices.Asyearspass,andtheservicesareused,thecostistransferredtodepreciationexpense.PlantAssetsLong-livedassetsMajorCategoriesofPlantAssetsMajorCategoriesofPlantAsseAccountableEventsAcquisition.Allocationoftheacquisitioncosttoexpenseovertheasset抯usefullife(depreciation).Saleordisposal.AccountableEventsAcquisition.AcquisitionofPlantAssetsAssetpriceReasonableandnecessarycosts......forgettingtheassettothedesiredlocation....forgettingtheassetreadyforuse.CostAcquisitionofPlantAssetsAssDeterminingCost

ExampleOnMay4,HeatCo.,anOhiomakerofstoves,buysanewmachinefromaTexascompany.Thenewmachinehasapriceof$52,000.Salestaxwascomputedat8%.HeatCo.pays$500shippingcosttogetthemachinetoOhio.Afterthemachinearrives,set-upcostsof$1,300areincurred,alongwith$4,000intestingcosts.ComputethecostofHeatCo.’snewmachine.DeterminingCost

ExampleOnMayDeterminingCost

ExamplePreparethejournalentry.DeterminingCost

ExamplePreparDeterminingCost

ExampleDeterminingCost

ExampleSpecialConsiderationsImprovementstolandsuchasdriveways,fences,andlandscapingarerecordedseparately.LandImprovementsCostincludesrealestatecommissions,escrowfees,legalfees,clearingandgradingtheproperty.LandSpecialConsiderationsImprovemSpecialConsiderationsRepairsmadepriortothebuildingbeingputinuseareconsideredpartofthebuilding抯cost.BuildingsSpecialConsiderationsRepairsSpecialConsiderationsEquipmentRelatedinterest,insurance,andpropertytaxesaretreatedasexpensesofthecurrentperiod.SpecialConsiderationsEquipmenSpecialConsiderationsIthinkI抣lbuythewholething;barn,land,andanimals.AllocationofaLump-SumPurchaseSpecialConsiderationsIthinkSpecialConsiderationsThetotalcostmustbeallocatedtoseparateaccountsforeachasset.TheallocationisbasedontherelativeFairMarketValueofeachassetpurchased.AllocationofaLump-SumPurchaseSpecialConsiderationsThetotaCapitalExpendituresandRevenueExpendituresCapitalExpendituresandRevenDepreciationTheallocationofthecostofaplantassettoexpenseintheperiodsinwhichservicesarereceivedfromtheasset.CostofplantassetsBalanceSheetAssets:PlantandequipmentIncomeStatementRevenues:Expenses:DepreciationastheservicesarereceivedDepreciationTheallocationofBookValueCost-AccumulatedDepreciationAccumulatedDepreciationContra-assetRepresentstheportionofanasset抯costthathasalreadybeenallocatedtoexpense.CausesofDepreciationPhysicaldeteriorationObsolescenceDepreciationBookValueDepreciationCost-ResidualValue

LifeinYearsDepreciationExpenseperYear=Straight-LineDepreciationCost-ResidualValue

LifeiStraight-LineMethod

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthestraight-linemethod.Straight-LineMethod

ExampleOnStraight-LineMethod

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthestraight-linemethod.Straight-LineMethod

ExampleOnStraight-LineMethod

ExampleBassCo.willrecord$4,200depreciationeachyearforfiveyears.Totaldepreciationovertheestimatedusefullifeoftheboatis:SalvageValueStraight-LineMethod

ExampleBaStraight-LineMethod

GraphofDepreciationExpenseStraight-LineMethod

GraphofDepreciationforFractionalPeriodsWhenanassetisacquiredduringtheyear,depreciationintheyearofacquisitionmustbeprorated.Half-YearConventionIntheyearofacquisition,recordsixmonthsofdepreciation.DepreciationforFractionalPeUsingthehalf-yearconvention,calculatethestraight-linedepreciationonDecember31,1999,forequipmentpurchasedin1999.Theequipmentcost$75,000,hasausefullifeof10yearsandanestimatedsalvagevalueof$5,000.Half-YearConvention

ExampleUsingthehalf-yearconventionDepreciation =($75,000-$5,000)?10 =$7,000forafullyearDepreciation=$7,000?1/2

=$3,500Usingthehalf-yearconvention,calculatethestraight-linedepreciationonDecember31,1999,forequipmentpurchasedin1999.Theequipmentcost$75,000,hasausefullifeof10yearsandanestimatedsalvagevalueof$5,000.Half-YearConvention

ExampleDepreciation =($75,000-Declining-BalanceMethodDepreciationintheearlyyearsofanasset’sestimatedusefullifeishigherthaninlateryears.Thedouble-decliningbalanceaccelerateddepreciationrateis200%ofthestraight-linedepreciationrateof1/UsefulLife.Declining-BalanceMethodDeprecDouble-DecliningBalance

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthedouble-decliningbalancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthedouble-decliningbalancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleComputedepreciationfortherestoftheboat抯estimatedusefullife.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleTotaldepreciationovertheestimatedusefullifeofanassetisthesameusingeitherthestraight-linemethodorthedeclining-balancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

GraphofDepreciationExpenseDouble-DecliningBalance

GraphDepreciationMethodsinUseforFinancialReportingDepreciationMethodsinUsefoMACRS:TheTaxMethodMACRS=ModifiedAcceleratedCostRecoverySystemBasedonDeclining-BalanceMethodsTheonlyacceleratedmethodallowedbytheIRSwhencomputingdepreciationfortaxreturnpurposes.AssetCost?MACRSrateRatesareavailablefromtablesprovidedbytheIRS.MACRS:TheTaxMethodMACRS=MOtherIssuesEstimatesofUsefulLifeandResidualValueMaydifferfromcompanytocompany.Thereasonablenessofmanagement抯estimatesisevaluatedbyexternalauditors.PrincipleofConsistencyCompaniesshouldavoidswitchingdepreciationmethodsfromperiodtoperiod.OtherIssuesEstimatesofUsefuRevisingDepreciationRatesSodepreciation

isanestimate.Predicted

salvagevaluePredicted

usefullifeOverthelifeofanasset,newinformationmaycometolightthatindicatesthe

originalestimatesneedtoberevised.RevisingDepreciationRatesSoOnJanuary1,1998,equipmentwaspurchasedthatcost$30,000,hasausefullifeof10yearsandnosalvagevalue.During2001,theusefullifewasrevisedto8yearstotal(5yearsremaining).

CalculatedepreciationexpensefortheyearendedDecember31,2001,usingthestraight-linemethod.RevisingDepreciationRatesExampleOnJanuary1,1998,equipmentRevisingDepreciationRatesExampleBookvalueat

dateofchangeSalvagevalueat

dateofchangeRemainingusefullifeatdateofchangeWhenourestimateschange,depreciationis:RevisingDepreciationRatesExRevisingDepreciationRatesExampleWhenourestimateschange,depreciationis:Bookvalueat

dateofchangeSalvagevalueat

dateofchangeRemainingusefullifeatdateofchangeRevisingDepreciationRatesExImpairmentofAssetsIfthecostofanassetcannotberecoveredthroughfutureuseorsale,theassetshouldbewrittendowntoitsnetrealizablevalue.ImpairmentofAssetsIfthecosTimetomoveontoanewtopic.TimetomoveontoanewtopicUpdatedepreciation

tothedateofdisposal.Recordingcash

received(debit)orpaid(credit).Removingaccumulated

depreciation(debit).Journalizedisposalby:Removingthe

assetcost(credit).Recordinga

gain(credit)orloss(debit).DisposalofPlantandEquipmentUpdatedepreciation

tothedIfCash>BV,recordagain(credit).IfCash<BV,recordaloss(debit).IfCash=BV,nogainorloss.DisposalofPlantandEquipmentRecordingcash

received(debit)orpaid(credit).Removingaccumulated

depreciation(debit).Removingthe

assetcost(credit).Recordinga

gain(credit)orloss(debit).IfCash>BV,recordagain(cOnSeptember30,1999,EvansMapCompanysellsamachinethatoriginallycost$100,000for$60,000cash.ThemachinewasplacedinserviceonJanuary1,1994.Ithasbeendepreciatedusingthestraight-linemethodwithanestimatedsalvagevalueof$20,000andanestimatedusefullifeof10years.

Let抯answerthefollowingquestions.DisposalofPlantandEquipment

ExampleOnSeptember30,1999,Evans

TheamountofdepreciationrecordedonSeptember30,1999,

tobringdepreciationuptodateis: a. $8,000. b. $6,000. c. $4,000. d. $2,000.DisposalofPlantandEquipment

Example Theamountofdepreciationre

TheamountofdepreciationrecordedonSeptember30,1999,

tobringdepreciationuptodateis:

a. $8,000.

b. $6,000.

c. $4,000. d. $2,000.AnnualDepreciation:($100,000-$20,000)÷10Yrs.=$8,000DepreciationtoSept.30:9/12$8,000=$6,000DisposalofPlantandEquipment

Example Theamountofdepreciationre

Afterupdatingthedepreciation,themachine’sbookvalueonSeptember30,1999,is: a. $54,000. b. $46,000. c. $40,000. d. $60,000.DisposalofPlantandEquipment

ExampleAfterupdatingthedepreciati

Afterupdatingthedepreciation,themachine’sbookvalueonSeptember30,1999,is:

a. $54,000.

b. $46,000. c. $40,000. d. $60,000.DisposalofPlantandEquipment

ExampleAfterupdatingthedepreciatiDisposalofPlantandEquipment

ExampleThemachine’ssaleresultedin: a. againof$6,000.

b. againof$4,000. c. alossof$6,000. d. alossof$4,000.DisposalofPlantandEquipmenThemachine’ssaleresultedin: a. againof$6,000.

b. againof$4,000. c. alossof$6,000. d. alossof$4,000.DisposalofPlantandEquipment

ExampleThemachine’ssaleresultedinTradinginUsedAssetsonNewAccountingdependsonwhether

assetsaresimilarordissimilar.Airplane

for

AirplaneTruck

for

AirplaneOnlysituationswherecash

ispaidwillbedemonstrated.TradinginUsedAssetsonNewTradinginUsedAssetsonNewTradinginUsedAssetsonNewOnMay30,1999,EssexCompanyexchangedausedairplaneand$35,000cashforanewairplane.Theoldairplaneoriginallycost$40,000,hadup-to-dateaccumulateddepreciationof$30,000,andafairvalueof$4,000.SIMILARTradinginUsedAssetsonNew

SimilarExchangeExampleOnMay30,1999,EssexCompaTheexchangeresultedina:

a. gainof$6,000. b. lossof$6,000. c. lossof$4,000. d. gainof$4,000.TradinginUsedAssetsonNew

SimilarExchangeExampleTheexchangeresultedina:TraTheexchangeresultedina:

a. gainof$6,000. b. lossof$6,000.

c. lossof$4,000. d. gainof$4,000.Prepareajournalentry

torecordtheexchange.TradinginUsedAssetsonNew

SimilarExchangeExampleTheexchangeresultedina:PreTradinginUsedAssetsonNew

SimilarExchangeExampleTradinginUsedAssetsonNew

Let’schangethesubject!Let’schangethesubject!IntangibleAssetsNoncurrentassets

withoutphysical

substance.Usefullifeis

oftendifficult

todetermine.Usuallyacquired

foroperational

use.CharacteristicsOftenprovide

exclusiverights

orprivileges.IntangibleAssetsNoncurrentasPatentsCopyrightsLeaseholdsLeasehold

ImprovementsGoodwillTrademarksand

TradeNames

Recordatcurrentcashequivalentcost,includingpurchaseprice,legalfees,andfilingfees.IntangibleAssetsPatentsRecordatcurrentAmortizeovershorterofeconomic

lifeorlegallife,subjecttoamaximum

of40years.Usestraight-linemethod.Researchanddevelopmentcostsare

normallyexpensedasincurred.IntangibleAssetsAmortizeovershorterofeconOccurswhenone

companybuys

anothercompany.Theamountbywhichthe

purchasepriceexceedsthefair

marketvalueofnetassetsacquired.GoodwillOnlypurchased

goodwillisan

intangibleasset.GoodwillOccurswhenone

companybuys

aGoodwill

Example

EddyCompanypaid$1,000,000topurchaseallofJamesCompany’sassetsandassumedliabilitiesof$200,000.Theacquiredassetswereappraisedatafairvalueof$900,000.Goodwill

ExampleEddyCompanWhatamountofgoodwillshouldberecordedonEddyCompanybooks? a. $100,000. b. $200,000. c. $300,000. d. $400,000.Goodwill

Example

WhatamountofgoodwillshouldWhatamountofgoodwillshouldberecordedonEddyCompanybooks?

a. $100,000. b. $200,000. c. $300,000.

d. $400,000.Goodwill

Example

WhatamountofgoodwillshouldIntangibleAssets

PatentsExclusiverightgranted

byfederalgovernmenttosellormanufactureaninvention.Costispurchase

pricepluslegal

costtodefend.Amortizecost

overtheshorterof

usefullifeor17years.IntangibleAssets

PatentsExAsymbol,design,orlogo

associatedwithabusiness.Purchased

trademarks

arerecorded

atcost,and

amortizedover

shorteroflegal

oreconomiclife,

or40years.Internally

developed

trademarks

haveno

recorded

assetcost.IntangibleAssets

TrademarksandTradeNamesAsymbol,design,orlogo

Legallyprotectedrighttosellproductsorprovideservicespurchasedbyfranchiseefromfranchisor.Purchasepriceisintangibleassetwhichisamortizedovertheshorteroftheprotectedrightor40years.IntangibleAssets

FranchisesLegallyprotectedrighttoIntangibleAssets

CopyrightsExclusiverightgrantedbythefederalgovernmenttoprotectartisticorintellectualproperties.Amortizecost

overaperiodnot

toexceed40years.Legallifeis

lifeofcreator

plus50years.IntangibleAssets

CopyrightsLet’sChangetheSubjectAgain!Let’sChangetheSubjectAgainTotalcost,

including

explorationand

development,

ischargedto

depletionexpense

overperiods

benefited.NaturalResourcesExamples:oil,coal,goldExtractedfrom

thenatural

environment

andreported

atcostless

accumulated

depletion.Totalcost,

including

exploraDepletionofNaturalResourcesDepletioniscalculatedusingtheunits-of-productionmethod.Unitdepletionrateiscalculatedasfollows:TotalUnitsofCapacityCostSalvageValueDepletionofNaturalResourcesTotaldepletioncostforaperiodis:UnitDepletionRateNumberofUnitsExtractedinPeriodDepletionofNaturalResourcesTotal

depletion

costInventory

forsaleUnsold

InventoryCostof

goodssoldTotaldepletioncostforaperABCMiningacquiredatractoflandcontainingoredeposits.Totalcostsofacquisitionanddevelopmentwere$1,000,000andABCestimatedthelandcontained40,000tonsofore.DepletionofNaturalResources

Example

ABCMiningacquiredatractofDepletionofNaturalResources

Example

WhatisABC’sdepletionrate?

a. $40perton. b. $50perton. c. $25perton. d. $20perton.DepletionofNaturalResourcesWhatisABC’sdepletionrate?

a. $40perton. b. $50perton.

c. $25perton.

d. $20perton.Cost?Units$1,000,000÷40,000Tons=$25PerTonDepletionofNaturalResources

Example

WhatisABC’sdepletionrate?CFortheyearABCminedandsold13,000tons.Whatisthetotaldepletioncostfortheyear? a. $300,000. b. $325,000. c. $225,000. d. $275,000.DepletionofNaturalResources

Example

FortheyearABCminedandsolFortheyearABCminedandsold13,000tons.Whatisthetotaldepletioncostfortheyear?

a. $300,000.

b. $325,000. c. $225,000. d. $275,000.Depletioncost=13,000x$25=$325,000DepletionofNaturalResources

Example

FortheyearABCminedandsolSpecializedplantassetsmayberequiredtoextractthenaturalresource.Theseassetsarerecordedinaseparateaccountanddepreciated.DepletionofNaturalResourcesSpecializedplantassetsmaybEndofChapter9EndofChapter9Chapter9PlantAssetsandDepreciationChapter9PlantAssetsandDeprPlantAssetsLong-livedassetsacquiredforuseinbusinessoperations.Similartolong-termprepaidexpensesThecostofplantassetsistheadvancepurchaseofservices.Asyearspass,andtheservicesareused,thecostistransferredtodepreciationexpense.PlantAssetsLong-livedassetsMajorCategoriesofPlantAssetsMajorCategoriesofPlantAsseAccountableEventsAcquisition.Allocationoftheacquisitioncosttoexpenseovertheasset抯usefullife(depreciation).Saleordisposal.AccountableEventsAcquisition.AcquisitionofPlantAssetsAssetpriceReasonableandnecessarycosts......forgettingtheassettothedesiredlocation....forgettingtheassetreadyforuse.CostAcquisitionofPlantAssetsAssDeterminingCost

ExampleOnMay4,HeatCo.,anOhiomakerofstoves,buysanewmachinefromaTexascompany.Thenewmachinehasapriceof$52,000.Salestaxwascomputedat8%.HeatCo.pays$500shippingcosttogetthemachinetoOhio.Afterthemachinearrives,set-upcostsof$1,300areincurred,alongwith$4,000intestingcosts.ComputethecostofHeatCo.’snewmachine.DeterminingCost

ExampleOnMayDeterminingCost

ExamplePreparethejournalentry.DeterminingCost

ExamplePreparDeterminingCost

ExampleDeterminingCost

ExampleSpecialConsiderationsImprovementstolandsuchasdriveways,fences,andlandscapingarerecordedseparately.LandImprovementsCostincludesrealestatecommissions,escrowfees,legalfees,clearingandgradingtheproperty.LandSpecialConsiderationsImprovemSpecialConsiderationsRepairsmadepriortothebuildingbeingputinuseareconsideredpartofthebuilding抯cost.BuildingsSpecialConsiderationsRepairsSpecialConsiderationsEquipmentRelatedinterest,insurance,andpropertytaxesaretreatedasexpensesofthecurrentperiod.SpecialConsiderationsEquipmenSpecialConsiderationsIthinkI抣lbuythewholething;barn,land,andanimals.AllocationofaLump-SumPurchaseSpecialConsiderationsIthinkSpecialConsiderationsThetotalcostmustbeallocatedtoseparateaccountsforeachasset.TheallocationisbasedontherelativeFairMarketValueofeachassetpurchased.AllocationofaLump-SumPurchaseSpecialConsiderationsThetotaCapitalExpendituresandRevenueExpendituresCapitalExpendituresandRevenDepreciationTheallocationofthecostofaplantassettoexpenseintheperiodsinwhichservicesarereceivedfromtheasset.CostofplantassetsBalanceSheetAssets:PlantandequipmentIncomeStatementRevenues:Expenses:DepreciationastheservicesarereceivedDepreciationTheallocationofBookValueCost-AccumulatedDepreciationAccumulatedDepreciationContra-assetRepresentstheportionofanasset抯costthathasalreadybeenallocatedtoexpense.CausesofDepreciationPhysicaldeteriorationObsolescenceDepreciationBookValueDepreciationCost-ResidualValue

LifeinYearsDepreciationExpenseperYear=Straight-LineDepreciationCost-ResidualValue

LifeiStraight-LineMethod

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthestraight-linemethod.Straight-LineMethod

ExampleOnStraight-LineMethod

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthestraight-linemethod.Straight-LineMethod

ExampleOnStraight-LineMethod

ExampleBassCo.willrecord$4,200depreciationeachyearforfiveyears.Totaldepreciationovertheestimatedusefullifeoftheboatis:SalvageValueStraight-LineMethod

ExampleBaStraight-LineMethod

GraphofDepreciationExpenseStraight-LineMethod

GraphofDepreciationforFractionalPeriodsWhenanassetisacquiredduringtheyear,depreciationintheyearofacquisitionmustbeprorated.Half-YearConventionIntheyearofacquisition,recordsixmonthsofdepreciation.DepreciationforFractionalPeUsingthehalf-yearconvention,calculatethestraight-linedepreciationonDecember31,1999,forequipmentpurchasedin1999.Theequipmentcost$75,000,hasausefullifeof10yearsandanestimatedsalvagevalueof$5,000.Half-YearConvention

ExampleUsingthehalf-yearconventionDepreciation =($75,000-$5,000)?10 =$7,000forafullyearDepreciation=$7,000?1/2

=$3,500Usingthehalf-yearconvention,calculatethestraight-linedepreciationonDecember31,1999,forequipmentpurchasedin1999.Theequipmentcost$75,000,hasausefullifeof10yearsandanestimatedsalvagevalueof$5,000.Half-YearConvention

ExampleDepreciation =($75,000-Declining-BalanceMethodDepreciationintheearlyyearsofanasset’sestimatedusefullifeishigherthaninlateryears.Thedouble-decliningbalanceaccelerateddepreciationrateis200%ofthestraight-linedepreciationrateof1/UsefulLife.Declining-BalanceMethodDeprecDouble-DecliningBalance

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthedouble-decliningbalancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleOnJanuary1,1998,BassCo.buysanewboat.BassCo.pays$24,000fortheboat.Theboathasanestimatedresidualvalueof$3,000andanestimatedusefullifeof5years.Computedepreciationfor1998usingthedouble-decliningbalancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleComputedepreciationfortherestoftheboat抯estimatedusefullife.Double-DecliningBalance

ExampDouble-DecliningBalance

ExampleTotaldepreciationovertheestimatedusefullifeofanassetisthesameusingeitherthestraight-linemethodorthedeclining-balancemethod.Double-DecliningBalance

ExampDouble-DecliningBalance

GraphofDepreciationExpenseDouble-DecliningBalance

GraphDepreciationMethodsinUseforFinancialReportingDepreciationMethodsinUsefoMACRS:TheTaxMethodMACRS=ModifiedAcceleratedCostRecoverySystemBasedonDeclining-BalanceMethodsTheonlyacceleratedmethodallowedbytheIRSwhencomputingdepreciationfortaxreturnpurposes.AssetCost?MACRSrateRatesareavailablefromtablesprovidedbytheIRS.MACRS:TheTaxMethodMACRS=MOtherIssuesEstimatesofUsefulLifeandResidualValueMaydifferfromcompanytocompany.Thereasonablenessofmanagement抯estimatesisevaluatedbyexternalauditors.PrincipleofConsistencyCompaniesshouldavoidswitchingdepreciationmethodsfromperiodtoperiod.OtherIssuesEstimatesofUsefuRevisingDepreciationRatesSodepreciation

isanestimate.Predicted

salvagevaluePredicted

usefullifeOverthelifeofanasset,newinformationmaycometolightthatindicatesthe

originalestimatesneedtoberevised.RevisingDepreciationRatesSoOnJanuary1,1998,equipmentwaspurchasedthatcost$30,000,hasausefullifeof10yearsandnosalvagevalue.During2001,theusefullifewasrevisedto8yearstotal(5yearsremaining).

CalculatedepreciationexpensefortheyearendedDecember31,2001,usingthestraight-linemethod.RevisingDepreciationRatesExampleOnJanuary1,1998,equipmentRevisingDepreciationRatesExampleBookvalueat

dateofchangeSalvagevalueat

dateofchangeRemainingusefullifeatdateofchangeWhenourestimateschange,depreciationis:RevisingDepreciationRatesExRevisingDepreciationRatesExampleWhenourestimateschange,depreciationis:Bookvalueat

dateofchangeSalvagevalueat

dateofchangeRemainingusefullifeatdateofchangeRevisingDepreciationRatesExImpairmentofAssetsIfthecostofanassetcannotberecoveredthroughfutureuseorsale,theassetshouldbewrittendowntoitsnetrealizablevalue.ImpairmentofAssetsIfthecosTimetomoveontoanewtopic.TimetomoveontoanewtopicUpdatedepreciation

tothedateofdisposal.Recordingcash

received(debit)orpaid(credit).Removingaccumulated

depreciation(debit).Journalizedisposalby:Removingthe

assetcost(credit).Recordinga

gain(credit)orloss(debit).DisposalofPlantandEquipmentUpdatedepreciation

tothedIfCash>BV,recordagain(credit).IfCash<BV,recordaloss(debit).IfCash=BV,nogainorloss.DisposalofPlantandEquipmentRecordingcash

received(debit)orpaid(credit).Removingaccumulated

depreciation(debit).Removingthe

assetcost(credit).Recordinga

gain(credit)orloss(debit).IfCash>BV,recordagain(cOnSeptember30,1999,EvansMapCompanysellsamachinethatoriginallycost$100,000for$60,000cash.ThemachinewasplacedinserviceonJanuary1,1994.Ithasbeendepreciatedusingthestraight-linemethodwithanestimatedsalvagevalueof$20,000andanestimatedusefullifeof10years.

Let抯answerthefollowingquestions.DisposalofPlantandEquipment

ExampleOnSeptember30,1999,Evans

TheamountofdepreciationrecordedonSeptember30,1999,

tobringdepreciationuptodateis: a. $8,000. b. $6,000. c. $4,000. d. $2,000.DisposalofPlantandEquipment

Example Theamountofdepreciationre

TheamountofdepreciationrecordedonSeptember30,1999,

tobringdepreciationuptodateis:

a. $8,000.

b. $6,000.

c. $4,000. d. $2,000.AnnualDepreciation:($100,000-$20,000)÷10Yrs.=$8,000DepreciationtoSept.30:9/12$8,000=$6,000DisposalofPlantandEquipment

Example Theamountofdepreciationre

Afterupdatingthedepreciation,themachine’sbookvalueonSeptember30,1999,is: a. $54,000. b. $46,000. c. $40,000. d. $60,000.DisposalofPlantandEquipment

ExampleAf