depreciation (cost adjusting provided (Refer to simple allocation) and that it does entries: Appendices 5.A and not set aside funds for depreciation of a 5.B). replacement new asset using The concepts of original either method cost, scrap or residual depreciation of an value, accumulated existing asset using depreciation and written the straight line down value (net asset or method carrying value) complex adjusting Determining the cost of a entries: depreciable non-current depreciation of a asset new asset for a Identifying the more part period appropriate method of depreciation of an depreciation to apply existing asset using Straight-line the diminishing Reducing/diminishing balance method balance Calculating depreciation Note: Journal entries and using both the straight line posting to the ledger for and diminishing balance Disposal or Gain and Loss method (Formulae – Refer on Disposal accounts are not to Appendix 10) required. Small business depreciation pooling (basic introduction only, no practical application required) Calculating the gain or loss on disposal of non-current assets and classify the gain as revenue and the loss as an expense in the Income Statement. (Refer to Appendix 6). 3.7 The impact of accounts receivable Nature of bad and Prepare general journal Use a trial balance
depreciation (cost allocation) and that it does not set aside funds for replacement The concepts of original cost, scrap or residual value, accumulated depreciation and written down value (net asset or carrying value) Determining the cost of a depreciable non-current asset Identifying the more appropriate method of depreciation to apply Straight-line Reducing/diminishing balance Calculating depreciation using both the straight line and diminishing balance method (Formulae – Refer to Appendix 10) Small business depreciation pooling (basic introduction only, no practical application required) Calculating the gain or loss on disposal of non-current assets and classify the gain as revenue and the loss as an expense in the Income Statement. (Refer to Appendix 6). simple adjusting entries: depreciation of a new asset using either method depreciation of an existing asset using the straight line method complex adjusting entries: depreciation of a new asset for a part period depreciation of an existing asset using the diminishing balance method Note: Journal entries and posting to the ledger for Disposal or Gain and Loss on Disposal accounts are not required. provided (Refer to Appendices 5.A and 5.B). 3.7 The impact of accounts receivable Nature of bad and Prepare general journal Use a trial balance
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