MGT 11A Chapter 8: CHAPTER 8 - pt 3
Document Summary
Discarding plant assets: no longer useful to the company and has no market value. Consider equipment costing ,000 with accumulated depreciation of ,000 on december 31 of the prior fiscal year-end. This equipment is being depreciated using the straight-line method over. On july 1 of the current year, it is discarded. Ex: consider bto"s march 31 sale of equipment cost ,000 and has accumulated depreciation of at dec 31 of the prior calendar year- end. Annual depreciation on this equipment is using straight-line. Step 1: record depreciation expense and update accumulated depreciation to march 31 of the current year. Ex: if bto receives , an amount that is above the equipment"s book value as of march 31, a gain is recorded. Ex: if bto receives , an amount that is below the equipment"s book value as of march 31, a loss is recorded.
