Help, Disposal And Depreciation

kazseera

I CANT SEEM TO GET MY HEAD AROUND DISPOSALS OF ASSETS AND DEPRIECIATION... i know how to work out the depreciation. I dont know how to do journal entries or T accounts for the disposal or depreciaion.



Are there any easy ways to remember for the exam.???

trini

Are there any easy ways to remember for the exam.???

Not sure, but just remember, depreciation is an expense so it always goes on the debit side, and accumulated dep'n is recorded on the credit side.
-Debit depreciation with the amount of depreciation charge for the year
-Credit accumulated depreciation with the same amount

for disposals i usually do as follows
1)Credit asset account with the cost of the asset,
Debit disposal with the same amount
2) Debit accumulated depreciation with the accumulated depreciation for the asset in question
Credit disposals with the same amount
If the old asset has been traded in, do this:
3) Debit the asset account with the amount trade in
Credit disposals with the same amount

Hope this helps.

agatha

you just have to remember that you have to put 3 things in disposal:
Original cost of asset DEBIT
Accumulated Depreciation CREDIT
NET SALES proceeds CREDIT
if you remember this you can work out everything else by reversing

kazseera

aaw thanks, trini and agatha :-)

il just have to revise this everyday now, until it sticks into my head