ACCT 200 Outline of Last Lecture I Expenditures II Expenditures Table III Recording an asset IV Capitalization V Land or Land Improvement VI Depreciation Outline of Current Lecture I Some Definitions II Double Declining Balance Method Example III Disposal of Fixed Assets Current Lecture I Some Definitions a Accumulated depreciation contra asset b Net book value historical cost accumulated depreciation c Accumulated depreciation at end of useful life depreciable cost d Book value at end of useful life residual value e NEVER depreciate below residual value II Double Declining Balance Method Example Given that Historical Cost 330 000 with 5 years of useful life These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Annual depreciation expense Year end accumulated depreciation Year end book value 2014 132 000 132 000 198 000 2015 79 200 211 200 118 800 2016 47 520 258 720 71 280 2017 28 512 287 232 42 768 2018 24 768 312 000 18 000 330 000 0 x 2 5 132 000 330 000 132 000 x 2 5 79 200 330 000 132 000 79 200 x 2 5 47 520 330 000 132 000 79 200 47 520 x 2 5 28 512 In the first year accumulated depreciation always equals 0 III Disposal of Fixed Assets a Gains selling price book value b Losses selling price book value c Steps in recording fixed asset disposal i Catch up depreciation to the end of the previous period 1 Increase depreciation expense 2 Increase accumulated depreciation ii Record the disposal 1 Increase cash asset received 2 Decrease accumulated depreciation 3 Decrease asset disposed of 4 Increase gain or loss on sale d To catch up depreciation since the end of the last full year amount of 1 year of depreciation x remaining months you had it 12 e Gain Loss selling price net book value
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