【正文】 . E x p e n s eA c c u m u l a t e d D e p r e c i a t i o nB o o k V a l u e1998 2 4 , 0 0 0$ 40% 9 , 6 0 0$ 9 , 6 0 0$ 1 4 , 4 0 0$ 1999 1 4 , 4 0 0$ 40% 5 , 7 6 0$ 1 5 , 3 6 0$ 8 , 6 4 0$ 2022 8 , 6 4 0$ 40% 3 , 4 5 6$ 1 8 , 8 1 6$ 5 , 1 8 4$ 2022 5 , 1 8 4$ 40% 2 , 0 7 4$ 2 0 , 8 9 0$ 3 , 1 1 0$ 2022 110$ 2 1 , 0 0 0$ 3 , 0 0 0$ T o t a l D e p r e c i a t i o n 2 1 , 0 0 0$ P l u g y e a r 5?The McGrawHill Companies, Inc., 1999 Slide 929 Irwin/McGrawHill DoubleDeclining Balance Example Y e a r C o m p u t a t i o nD e p r . E x p e n s eA c c u m u l a t e d D e p r e c i a t i o nB o o k V a l u e1998 2 4 , 0 0 0$ 40% 9 , 6 0 0$ 9 , 6 0 0$ 1 4 , 4 0 0$ 1999 1 4 , 4 0 0$ 40% 5 , 7 6 0$ 1 5 , 3 6 0$ 8 , 6 4 0$ 2022 8 , 6 4 0$ 40% 3 , 4 5 6$ 1 8 , 8 1 6$ 5 , 1 8 4$ 2022 5 , 1 8 4$ 40% 2 , 0 7 4$ 2 0 , 8 9 0$ 3 , 1 1 0$ 2022 110$ 2 1 , 0 0 0$ 3 , 0 0 0$ T o t a l D e p r e c i a t i o n 2 1 , 0 0 0$ P l u g y e a r 5Total depreciation over the estimated useful life of an asset is the same using either the straightline method or the decliningbalance method. ?The McGrawHill Companies, Inc., 1999 Slide 930 Irwin/McGrawHill DoubleDeclining Balance Graph of Depreciation Expense 9600576034562074110$0$ 1 ,0 0 0$ 2 ,0 0 0$ 3 ,0 0 0$ 4 ,0 0 0$ 5 ,0 0 0$ 6 ,0 0 0$ 7 ,0 0 0$ 8 ,0 0 0$ 9 ,0 0 0$ 1 0 ,0 0 01997 1998 1999 2022 2022 2022Fo r th e y e a r e nd e d De c e m be r 3 1Depreciation?The McGrawHill Companies, Inc., 1999 Slide 931 Irwin/McGrawHill Depreciation Methods in Use for Financial Reporting A sur v ey of 60 0 P ub l i cly O w ned Co r po r at i on s563441170539S tra i ght l i neDe c l i ni ngba l a nc eS um of t he y e a r s 39。 10 Yrs. = $8,000 Depreciation to Sept. 30: 9/12 ?$8,000 = $6,000 Disposal of Plant and Equipment Example ?The McGrawHill Companies, Inc., 1999 Slide 945 Irwin/McGrawHill After updating the depreciation, the machine’s book value on September 30, 1999, is: a. $54,000. b. $46,000. c. $40,000. d. $60,000. Disposal of Plant and Equipment Example ?The McGrawHill Companies, Inc., 1999 Slide 946 Irwin/McGrawHill After updating the depreciation, the machine’s book value on September 30, 1999, is: a. $54,000. b. $46,000. c. $40,000. d. $60,000. C os t 1 0 0 , 0 0 0$ A c c um ul a t e d D e pr e c i a t i on: ( 5 y r s . ? $ 8 , 0 0 0 ) + $ 6 , 0 0 0 = 4 6 , 0 0 0 B ook V a l ue 5 4 , 0 0 0$ Disposal of Plant and Equipment Example ?The McGrawHill Companies, Inc., 1999 Slide 947 Irwin/McGrawHill Disposal of Plant and Equipment Example The machine’s sale resulted in: a. a gain of $6,000. b. a gain of $4,000. c. a loss of $6,000. d. a loss of $4,000. ?The McGrawHill Companies, Inc., 1999 Slide 948 Irwin/McGrawHill The machine’s sale resulted in: a. a gain of $6,000. b. a gain of $4,000. c. a loss of $6,000. d. a loss of $4,000. C os t 1 0 0 , 0 0 0$ A c c um . D e pr . 4 6 , 0 0 0 B ook V a l ue 5 4 , 0 0 0$ C a s h R e c e i v e d 6 0 , 0 0 0 G a i n 6 , 0 0 0$ Disposal of Plant and Equipment Example ?The McGrawHill Companies, Inc., 1999 Slide 949 Irwin/McGrawHill Trading in Used Assets on New Accounting depends on whether assets are similar or dissimilar. Airplane for Airplane Truck for Airplane Only situations where cash is paid will be demonstrated. ?The McGrawHill Companies, Inc., 1999 Slide 950 Irwin/McGrawHill D i s s i m i l a r A s s e t sS i m i l a r A s s e t s a n d C a s h P a i d R e c o g n i z e G a i n s ?Y e s NoR e c o g n i z e L o s s e s ?Y e s Y e sTrading in Used Assets on New ?The McGrawHill Companies, Inc., 1999 Slide 951 Irwin/McGrawHill On May 30, 1999, Essex Company exchanged a used airplane and $35,000 cash for a new airplane. The old airplane originally cost $40,000, had uptodate accumulated depreciation of $30,000, and a fair value of $4,000. SIMILAR Trading in Used Assets on New Similar Exchange Example ?The McGrawHill Companies, Inc., 1999 Slide 952 Irwin/McGrawHill The exchange resulted in a: a. gain of $6,000. b. loss of $6,000. c. loss of $4,000. d. gain of $4,000. Trading in Used Assets on New Similar Exchange Example ?The McGrawHill Companies, Inc., 1999 Slide 953 Irwin/McGrawHill The exchange resulted in a: a. gain of $6,000. b. loss of $6,000. c. loss of $4,000. d. gain of $4,000. C o s t 4 0 , 0 0 0$A c c u m . D e p r. 3 0 , 0 0 0 B o o k V a l u e 1 0 , 0 0 0$F a i r V a l u e 4 , 0 0 0 L o s s 6 , 0 0 0$ Prepare a journal entry to record the exchange. Trading in Used Assets on New Similar Exchange Example ?The McGrawHill Companies, Inc., 1999 Slide 954 Irwin/McGrawHill Trading in Used Assets on New Similar Exchange Example D a t e D e s c r i p t i o n D e b i t C r e d i t3 0 M a y A i r p l a n e (n e w ) 3 9 , 0 0 0 A c c u m u l a te d De p r e c i a ti o n 3 0 , 0 0 0 L