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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 18-4 LESSON 18-4 Disposing of Plant Assets

Lesson 18 4

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Page 1: Lesson 18 4

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 18-4LESSON 18-4

Disposing of Plant Assets

Page 2: Lesson 18 4

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LESSON 18-4CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

SALE OF A PLANT ASSET FOR SALE OF A PLANT ASSET FOR BOOK VALUEBOOK VALUE

1. Record an entry in the cash receipts journal to remove the original cost.

page 546

January 6, 20X6. Received cash from sale of display case, $250.00: original cost, $3,250.00; total accumulated depreciation through December 31, 20X5, $3,000.00. Receipt No. 4.

2. Check the type of disposal, and write the date, and disposal amount in Section 2 of the plant asset record.

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LESSON 18-4CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

RECORDING A PLANT ASSET’S DEPRECIATION RECORDING A PLANT ASSET’S DEPRECIATION EXPENSE FOR A PARTIAL YEAREXPENSE FOR A PARTIAL YEAR page 547

April 4, 20X7. Recorded a partial year’s depreciation on a safe to be sold, $60.00. Memorandum No. 31.

1. Debit the depreciation expense account.

2. Credit the accumulated depreciation account.

3. Update Section 3 of the plant asset record.

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LESSON 18-4CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

SALE OF A PLANT ASSET FOR MORE SALE OF A PLANT ASSET FOR MORE THAN BOOK VALUETHAN BOOK VALUE

1. Remove the original cost. Record the gain on the sale. Record the cash received from the sale.

page 548

April 4, 20X7. Received cash from sale of safe, $425.00: original cost, $1,800.00; accumulated depreciation through April 4, 20X7, $1,500.00. Receipt No. 47.

2. Check the type of disposal. Write the date and disposal amount in Section 2 of the plant asset record.

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LESSON 18-4CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

1. Remove the original cost. Record the loss on the sale. Record the cash received from the sale.

SALE OF A PLANT ASSET FOR LESS SALE OF A PLANT ASSET FOR LESS THAN BOOK VALUETHAN BOOK VALUE

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page 549

October 6, 20X7. Received cash from sale of a computer, $150.00: original cost, $1,900.00; total accumulated depreciation through October 1, 20X7, $1,500.00. Receipt No. 281.

2. Check the type of disposal and write the date and disposal amount in Section 2.

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LESSON 18-4CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

gain on plant assets loss on plant assets

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