lesson 18-1
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LESSON 18-1. Buying Plant Assets and Paying Property Tax. LESSON 17-2. Writing Off and Collecting Uncollectible Accounts Receivable. 2. 2. JOURNALIZING WRITING OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLE. page 519. - PowerPoint PPT PresentationTRANSCRIPT
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-1LESSON 18-1
Buying Plant Assets and Paying Property Tax
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 17-2LESSON 17-2
Writing Off and Collecting Uncollectible Accounts Receivable
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
JOURNALIZING WRITING OFF AN JOURNALIZING WRITING OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLEUNCOLLECTIBLE ACCOUNT RECEIVABLE
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page 519
January 4. Wrote off Metro Food Court’s past-due account as uncollectible, $1,621.00. Memorandum No. 3.
1. Debit2. Credit and customer’s name
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
2. Post the credit amount to general ledger.
POSTING AN ENTRY TO WRITE OFF AN POSTING AN ENTRY TO WRITE OFF AN UNCOLLECTIBLE ACCOUNT RECEIVABLEUNCOLLECTIBLE ACCOUNT RECEIVABLE
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page 520
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1. Post the debit amount to general ledger.
3. Post the credit amount to customer account.
4. Write Written off in the customer account.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
REOPENING AN ACCOUNT REOPENING AN ACCOUNT PREVIOUSLY WRITTEN OFFPREVIOUSLY WRITTEN OFF
1. Enter a debit to Accounts Receivable. Place a diagonal line in the Post. Ref. column.
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page 521
January 30. Received cash in full payment of Metro Food Court’s account, previously written off as uncollectible, $1,621.00. Memorandum No. 5 and Receipt No. 12.
2. Enter a credit to Allowance for Uncollectible Accounts.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
RECORDING CASH RECEIVED FOR AN RECORDING CASH RECEIVED FOR AN ACCOUNT PREVIOUSLY WRITTEN OFFACCOUNT PREVIOUSLY WRITTEN OFF page 522
January 30. Received cash in full payment of Metro Food Court’s account, previously written off as uncollectible, $1,621.00. Memorandum No. 5 and Receipt No. 12.
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LESSON 17-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3. Write the words Reopen account in the Item column of the customer account.
POSTING ENTRIES FOR COLLECTING A POSTING ENTRIES FOR COLLECTING A WRITTEN-OFF ACCOUNT RECEIVABLEWRITTEN-OFF ACCOUNT RECEIVABLE page 523
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1. Post the general journal entry to the general ledger.
2. Post the debit portion of the general journal entry to the customer account.
4. Post the cash receipts journal entry to the customer account.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERM REVIEWTERM REVIEW
writing off an account
page 524
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
RECORDING THE BUYING OF A RECORDING THE BUYING OF A PLANT ASSETPLANT ASSET
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page 535
January 3, 20X1. Paid cash for a display case, $3,250.00. Check No. 4.
3. Cash paid
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2. Cost of the plant asset
1. Account title
4. Post
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
CALCULATING AND PAYING CALCULATING AND PAYING PROPERTY TAXPROPERTY TAX page 536
February 1. Classic Parts, Inc., paid cash for property tax, $720.00. Check No. 69.
AnnualProperty Tax
=Tax Rate×Assessed
Value
$720.00=1.2%×$60,000.00
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERMS REVIEWTERMS REVIEW
real property personal property assessed value
page 537
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-3LESSON 18-3
Journalizing Depreciation Expense
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3. Each year the asset is owned, record the year’s annual depreciation expense in Section 3. Calculate and record accumulated depreciation and ending book value.
PREPARING PLANT ASSET RECORDSPREPARING PLANT ASSET RECORDS
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page 542
2. Do not write in Section 2 until the asset is disposed of.
1. Write the information in Section 1 when the asset is purchased.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
JOURNALIZING ANNUAL DEPRECIATION JOURNALIZING ANNUAL DEPRECIATION EXPENSEEXPENSE page 543
3. Record adjusting entry
2. Accumulated Depreciation credit
1. Depreciation Expense debit
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
POSTING AN ADJUSTING ENTRY FOR POSTING AN ADJUSTING ENTRY FOR DEPRECIATION EXPENSEDEPRECIATION EXPENSE
1. Debit Depreciation Expense.
page 544
2. Credit Accumulated Depreciation.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERM REVIEWTERM REVIEW
plant asset record
page 545
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-4LESSON 18-4
Disposing of Plant Assets
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
SALE OF A PLANT ASSET FOR SALE OF A PLANT ASSET FOR BOOK VALUEBOOK VALUE
1. Record an entry in the cash receipts journal to remove the original cost.
page 546
January 6, 20X6. Received cash from sale of display case, $250.00: original cost, $3,250.00; total accumulated depreciation through December 31, 20X5, $3,000.00. Receipt No. 4.
2. Check the type of disposal, and write the date, and disposal amount in Section 2 of the plant asset record.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
RECORDING A PLANT ASSET’S DEPRECIATION RECORDING A PLANT ASSET’S DEPRECIATION EXPENSE FOR A PARTIAL YEAREXPENSE FOR A PARTIAL YEAR page 547
April 4, 20X7. Recorded a partial year’s depreciation on a safe to be sold, $60.00. Memorandum No. 31.
1. Debit the depreciation expense account.
2. Credit the accumulated depreciation account.
3. Update Section 3 of the plant asset record.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
SALE OF A PLANT ASSET FOR MORE SALE OF A PLANT ASSET FOR MORE THAN BOOK VALUETHAN BOOK VALUE
1. Remove the original cost. Record the gain on the sale. Record the cash received from the sale.
page 548
April 4, 20X7. Received cash from sale of safe, $425.00: original cost, $1,800.00; accumulated depreciation through April 4, 20X7, $1,500.00. Receipt No. 47.
2. Check the type of disposal. Write the date and disposal amount in Section 2 of the plant asset record.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
1. Remove the original cost. Record the loss on the sale. Record the cash received from the sale.
SALE OF A PLANT ASSET FOR LESS SALE OF A PLANT ASSET FOR LESS THAN BOOK VALUETHAN BOOK VALUE
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page 549
October 6, 20X7. Received cash from sale of a computer, $150.00: original cost, $1,900.00; total accumulated depreciation through October 1, 20X7, $1,500.00. Receipt No. 281.
2. Check the type of disposal and write the date and disposal amount in Section 2.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERMS REVIEWTERMS REVIEW
gain on plant assets loss on plant assets
page 550
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 18-5LESSON 18-5
Declining-Balance Method of Depreciation
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
CALCULATING DEPRECIATION USING THE CALCULATING DEPRECIATION USING THE DOUBLE DECLINING-BALANCE METHODDOUBLE DECLINING-BALANCE METHOD
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page 551
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1. Calculate the double declining-balance rate.
2. Determine the annual depreciation expense.
3. Determine the ending book value.
4. Transfer the ending book value to the beginning book value for the following year.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
CALCULATING THE LAST YEAR’S CALCULATING THE LAST YEAR’S DEPRECIATION EXPENSEDEPRECIATION EXPENSE
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page 552
1. Transfer the ending book value from Year 4 to the beginning book value of Year 5.
2. Subtract the salvage value from the beginning book value to determine the depreciation expense for the last year.
3. Verify that the ending book value is equal to the salvage value.
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
COMPARISON OF TWO METHODS OF COMPARISON OF TWO METHODS OF DEPRECIATIONDEPRECIATION page 553
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LESSON 18-1CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERM REVIEWTERM REVIEW
declining-balance method of depreciation
page 554