Professional Documents
Culture Documents
To Record Sale of Equipment
To Record Sale of Equipment
Breakdown
Book value of machine
Residual value
Depreciable amount
2,000,000
100,000
1,900,000
Useful life
10 years
Units of production
Year
Depreciation expense
Accumulated depreciation
1
190,000
190,000
2
190,000
380,000
3
190,000
570,000
Year
Units produced
Depreciation expense
Accumulated depreciation
1
80,000
217,143
217,143
2
80,000
217,143
434,286
3
80,000
217,143
651,429
Conclusion: Units of production. Depreciation method used shall best reflect the pattern which the asset's future economic benef
2,000,000
1,140,000
860,000
750,000
860,000
(110,000)
Accumulated Depreciation
Loss on disposal
Cash
Plant and equipment
To record sale of equipment
PPE
Cash
To record purchase of PPE
T accounts
Cash
Sale
Purchase
Sale
PPE
750,000
3,000,000
Accumulated Depreciation
1,140,000
1,140,000
-
Sale
Purchase
Loss on disposal
Sale
4
190,000
760,000
5
190,000
950,000
6
190,000
1,140,000
7
190,000
1,330,000
8
190,000
1,520,000
9
190,000
1,710,000
4
80,000
217,143
868,571
5
80,000
217,143
1,085,714
6
60,000
162,857
1,248,571
7
60,000
162,857
1,411,429
8
60,000
162,857
1,574,286
9
60,000
162,857
1,737,143
pattern which the asset's future economic benefit is expected to be consumed by the entity.
Journal entries
1,140,000
110,000
750,000 A+
2,000,000
3,000,000 A+
3,000,000
PPE
2,000,000
2,000,000
3,000,000
3,000,000
Loss on disposal
110,000
110,000
10
190,000
1,900,000
10
60,000
162,857
1,900,000
700,000