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You discarded a display case that had 7200 of accumulated depreciation which was 8000 at original purchase what gain or loss are involved?
Mgg2
loss of $800
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β 11y ago
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How is the net book value of a fixed asset is determined by?
Original cost less the accumulated depreciation
How is the net book value of a depreciable asset calculated?
The net book value of a depreciable asset is calculated by deducting the accumulated depreciation from the original cost of the asset. Accumulated depreciation is the total depreciation expense recorded over the life of the asset. This calculation allows for the determination of the asset's value at a specific point in time.
What is the book value of a fixed asset?
The original cost of the item less accumulated depreciation for the item. And The gross book value is the original/historical price paid for an asset, without a depreciation deduction.
How does depreciation expense on the income statement relate to accumulated depreciation on the balance sheet?
Depreciation expense on the income statement represents the portion of the asset's cost that is allocated as an expense during the reporting period. Accumulated depreciation on the balance sheet is a contra-asset account that reduces the asset's original cost by the total amount of depreciation expense recognized over its useful life. Thus, depreciation expense increases the accumulated depreciation balance on the balance sheet.
What is the definition of book value as applied to accounting?
carrying amount (original value of the asset minus accumulated depreciation)
What kind of an account is accumulated depreciation?
Accumulated depreciation is a contra asset account. Contra asset accounts are used to record the depreciation of an asset, which is a reduction in the asset's value due to wear and tear or obsolescence. Accumulated depreciation is recorded on a company's balance sheet as a reduction from the original cost of a fixed asset. For example, if a company buys a building for $100,000 and estimates that the building will last for 20 years, it might record $5,000 of depreciation expense per year. After four years, the accumulated depreciation for the building would be $20,000, which would be recorded as a reduction from the original cost of the building on the company's balance sheet. Here is my recommendation πΊβ Κ°Ε¦πΟοΌ³://ο½Κ·ε±±.πΞΉβΌβδΈΡβπβ¬ββ.βαΠΌ/ε°ΊΞ΅ΰΉπ¦Ε/βββ½ββΈβ /αΆ€πββΆπ§α΅αͺβα©πβ½Ρ²βΎ/ ππ
What is the accumulated depreciation that is offset against the fixed asset account?
If a piece of machinery (a fixed asset) costs $100,000, and the machine has an expected useful life of ten years, then, using the straight-line depreciation method, the machine depreciates at a rate of $10,000 a year. (100,000 divided by 10 is 10,000) At the end of the first year, the fixed asset account will show the original cost, but the depreciation account will show $10,000. To know the net value of the asset, the original cost of $100,000 is offset by the $10,000 depreciation, giving a net asset value of $90,000 dollars. At the end of the second year, the fixed asset account will still show the original cost, but the depreciation account will now show $20,000, being the accumulated total of (a) the first year's depreciation, and (b) the second year's depreciation. As the net value of the fixed asset is calculated by deducting the accumulated depreciation from the original cost, the net value will now be $80,000. i.e. $100,00 minus (offset by) the $20,000 accumulated depreciation. As the machine gets older it will be worth less. It's decreasing value, and its decreased value at any point is accounted for by deducting accumulated depreciation to date from the original cost of the fixed asset.
What happens to accumulated depreciation when a piece of equipment is sold Does it go up or down or is it not affected?
The accumulated depreciation relating to the piece of equipment will be eliminated from the accounts when the company disposes of the asset. The double entry for the sale of a piece of equipment would be-DR Cash/Bank (with the proceeds)DR Accumulated depreciation (with the total depreciation held for that asset)CR Equipment (with the original cost of the equipment)DR/CR Profit/loss on disposal (with the difference between the proceeds and the NBV of the asset at the time of sale).
Where does Accumulated Depreciation appear?
Accumulated depreciation is a contra asset account. So it goes with the assets but works in reverse from normal assets. So the debit side won't be increases, but rather decreases. And the credit side will be the increases. And it will be grouped with the fixed asset that's being depreciated. This way, you'll be able to see the original value and all the depreciation that's been taken.
What is the Journal entry for gain on sale of equipment?
debit accumulated depreciationdebit cashcredit assetcredit gain on sale of assetDebit to Cash (or Accounts Receivable) for the sale Price. Debit to Accumulated Depreciation for the total amount of depreciation charged against that piece of equipment since its original purchase date. Credit to Equipment account for the original purchase price. Credit to Gain on Sale of Fixed Asset (or Other Income) for the difference needed to balance the entry.
How to Make A Lapsing Schedule of Fixed Assets?
A lapsing schedule of fixed assets is a tool used by accountants to mark the depreciation value over time. The schedule includes original purchase cost of each asset, sales of the assets and accumulated depreciation.
Why sometime depreciation charged in income statement is not same as the increase in accumulated depreciation on balance sheet?
because whin using the composite depreciation or group depreciation method and want to sale an asets we make the cash is debt by the cash received and credit the assets by original cost and the diferrince debt accomulated depreciation , then the account of accomualted deprciation in the balance sheet will not the same as depriciation expene in the income statement
