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Accounting for Plant Assets and Depreciation

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Presentation on theme: "Accounting for Plant Assets and Depreciation"— Presentation transcript:

1 Accounting for Plant Assets and Depreciation
Chapter 18, Section 3 Journalizing Depreciation Expense

2 Preparing Plant Asset Records
Lesson 21-3 (GJ) Preparing Plant Asset Records 1 1. Write the information in Section 1 when the asset is purchased. 2 2. Do not write in Section 2 until the asset is disposed of. 3 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.

3 Accounts Affected by Depreciation
Office/Store Equipment Asset account to record original cost Depreciation Expense—Office/Store Equipment Expense account to record amount of annual depreciation expense Accumulated Depreciation—Office/Store Equipment Contra asset account to record accumulated depreciation

4 Journalizing Annual Depreciation Expense
1 2 1 1. Adjustment is planned on the worksheet first a. Depreciation Expense debit b. Accumulated Depreciation credit 2. Journalize adjusting entry (remember the heading “Adjusting Entries”)

5 Posting an Adjusting Entry for Depreciation Expense
1. Debit Depreciation Expense 2. Credit Accumulated Depreciation 1 2

6 PROBLEMS Complete the following on
Work Together 18-3 (text pg. 545) On Your Own 18-3 (text pg. 545) Application Problem 18-3 (text pg. 556) Application Problem 18-4 (text pg. 557)

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