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Practical Accounting for General Contractors

Practical Accounting for General Contractors


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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1922 Excerpt: ...Reserve for Depreciation 100,000 Transfer from latter to former account for the value of discarded plant. No part of this reserve should be set up as a current profit for such an item as rent, etc., as any profit accruing to the owner from depreciation charges is reflected in the sales which cover the cost charged from the reserve entry. The problem in this account is the amount to be charged against it for any part sold or discarded, so the following solution is submitted: A has Plant Equipment booked at $10,000 cost, with depreciation to date of $5,000. He sells part of this equipment for $600, which originally cost him $1,000. What entries should be made to show these facts in the books of account? The ledger accounts before entry of the above would be: Plant Equipment Reserve for Depreciation Cost, $10,000 Depreciation, $5,000 The following entry should be made: Debit: Accounts Receivable $600 Since Ho of the original cost value was sold, a proportionate amount of the reserve must be written back (10 per cent). When the above entry has been posted, the result on the above two accounts will be: To Plant 100,000 Reserve for Depreciation Credit: Plant Equipment... Profit and Loss $500 $1,000 $ 100 Plant Equipment Cost, $10,000 Sale, $1,000 Reserve for Depreciation Sale, $500 Depreciation, $5,000 The Plant Equipment account now has a balance of $9,000, and the Reserve account a balance of $4,500. The proportion between the two amounts is the same as before the entries were made. If the Plant features a number of big machines, a Plant Ledger should be operated under a Control Account, and each machine should be represented by a sub-account. The life of each machine is estimated and the amount of reserve is credited at the end of each month. Plant Account is ...


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Product Details
  • ISBN-13: 9781236444509
  • Publisher: Rarebooksclub.com
  • Publisher Imprint: Rarebooksclub.com
  • Height: 246 mm
  • No of Pages: 66
  • Spine Width: 4 mm
  • Width: 189 mm
  • ISBN-10: 1236444507
  • Publisher Date: 01 May 2012
  • Binding: Paperback
  • Language: English
  • Returnable: N
  • Weight: 136 gr

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