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Chapter 21 Section 3

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					Accounting 3

  Chapter 21
   Section 3
    Preparing Plant Asset Records
 A separate record is kept for each plant asset.
  This is called a Plant Asset Record.
 Section 1 is prepared when the asset is
  purchased. It includes, the description, account
  numbers, serial numbers, cost, etc.
 Section 2 provides space for recording the
  disposal information of the asset when it is
  taken out of use.
 Section 3 provides space for recording annual
  depreciation expense and the changing book
  value each year it is used.
        Plant Asset Record Example
Plant Asset Record No : ________                    General Ledger Account No: __________
Description: ________________________               General Ledger Account: ___________________
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
Est. Useful Life: __________   Est. Salvage Value: _________ Depreciation Method: ___________

Disposed of:                       Discarded _________ Sold __________ Traded __________


Date: _________________         Disposal Amount: ____________________


 Year      Annual Depreciation           Accumulated Depreciation             Ending Book Value
               Expense
    Journalizing Annual Depreciation Expense

 At the end of the fiscal year, after each
  plant assets depreciation has been figured
  and recorded, the total depreciation
  expense for all plant assets in the same
  plant asset account is calculated.
 In example, the depreciation expense of
  all plant assets in the store equipment
  account would need to be calculated.
    Journalizing Annual Depreciation Expense

 To journalize the depreciation expense of a plant
  asset account, an adjusting entry must be made
  using two accounts in the General Journal.
 First is Depreciation Expense- (type of plant
  asset). This account has a normal debit balance
  and increases with a debit.
 Second is Accumulated Depreciation- (type of
  plant asset). This account is used to keep track
  of all accumulated depreciation for each type of
  plant asset. It has a normal credit balance
  (because it is a contra asset account) and
  increases with a credit.
 Winning Edge determined that total depreciation expense
for store equipment is $8,750.00. After the adjustment has
             been planned on the worksheet…
                                              General Journal                                              15
                                                                                                      Page ___
                                                 Doc.    Post
Date                  Account Title                                    Debit              Credit
                                                 No.     Ref.



       31 Depreciation Expense-Store Equip.                        8 7 5 0 00
             Acc. Depr.-Store Equipment                                                  8 7 5 0 00




                 Posting for this transaction is done in the same way any other posting for General
                 Debit and Credit would be done.
                               Work Together p. 556
                                        On next four slides




                         134
Plant Asset Record No : ________                                                1215
                                                    General Ledger Account No: __________
              Television
Description: ________________________                                        Store Equipment
                                                    General Ledger Account: ___________________
              January 4, 2001              15SG152                           $700.00
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
                   3 years
Est. Useful Life: __________                        $100.00                        Straight-Line
                               Est. Salvage Value: _________ Depreciation Method: ___________

Disposed of:                       Discarded _________ Sold __________ Traded __________


Date: _________________         Disposal Amount: ____________________


 Year      Annual Depreciation           Accumulated Depreciation             Ending Book Value
               Expense
2001     $200.00                      $200.00                             $500.00
2002     $200.00                      $400.00                             $300.00
2003     $200.00                      $600.00                             $100.00
                                                                                    1205
                         135
Plant Asset Record No : ________                    General Ledger Account No: __________
              Office Desk
Description: ________________________                                       Office Equipment
                                                    General Ledger Account: ___________________
              May 27, 2001                 GE572N                            $920.00
Date Bought: _____________ Serial Number: __________________ Original Cost: _____________
                   6 years
Est. Useful Life: __________                        $200.00                        Straight Line
                               Est. Salvage Value: _________ Depreciation Method: ___________

Disposed of:                       Discarded _________ Sold __________ Traded __________


Date: _________________         Disposal Amount: ____________________


 Year      Annual Depreciation           Accumulated Depreciation             Ending Book Value
               Expense
2001     $70.00                       $70.00                              $850.00
2002     $120.00                      $190.00                             $730.00
2003     $120.00                      $310.00                             $610.00
                                              Gabriel, Inc.
                                              Worksheet
                                  For Year Ended, December 31, 2003

                                                       Trial Balance                            Adjustments
        Account Title
                                               Debit                   Credit           Debit                 Credit



Office Equipment                            24 5 8 7 00

Accumulated Depreciation-Office Equipment                         8 4 5 4 00                          (f)   3 1 2 0 00



Depreciation Expense-Office Equipment                                           (f)   3 1 2 0 00
                                              General Journal                            18
                                                                                    Page ___
                                                Doc.   Post
Date                  Account Title                             Debit      Credit
                                                No.    Ref.

                    Adjusting Entries

Dec    31 Depreciation Expense-Office Equip            6120   3 1 2 0 00
             Acc. Depreciation-Office Equip            1210                3 1 2 0 00
                                                                           General Ledger
Account   Accumulated Depreciation-Office Equipment                             Acct No.   1210
                           Post
Date                Item           Debit       Credit                BALANCE
                            Ref                              DEBIT             CREDIT

Jan 1     Balance                                                               8 4 5 4 00

Dec 31                     G18                 3 1 2 0 00                      11 5 7 4 00




Account
          Depreciation Expense-Office Equipment                                 Acct No.   6120
                           Post
Date                Item           Debit       Credit                BALANCE
                            Ref                              DEBIT             CREDIT

Dec 31                     G18    3 1 2 0 00                3 1 2 0 00
              Assignment
 Do Application 21-3 and 21-4 by hand.
 Turn it into Mrs. Middleton.
 Move on to Section 21-4.

				
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