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Plant Assets, Depreciation, Disposal, and Depletion

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This solution contains a Microsoft Power Point presentation with 55 slides that explains plant assets, depreciation, disposal of plant assets and depletion. Determining the cost of land, land improvements, buildings, and equipment is discussed. Each of these topics contains slides which explain and teach the concept, illustrate journal entries required and demonstrate the calculations necessary. How to calculate a change in the periodic rate is also shown. Plant asset disposal slides illustrate the following situations: retirement, loss on sale, and gain on sale. Depletion slides contain an example problem, calculations and a partial end of period balance sheet.

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Solution Summary

This solution is comprised of a Microsoft PowerPoint presentation containing 55 slides which will help students understand several related accounting topics. What are plant assets and what methods are used to determine the annual depreciation? How to calculate and record the annual depreciation expense for each method? How is the disposal of a plant asset calculated and record when it has been retired, sold at a loss or sold with a gain? How is the depletion of natural resources calculated, recorded and shown on a balance sheet?

Hopefully the answer to these questions along with the step-by-step explanation of these complicated topics provides students with a clear understanding of the concepts. Thank you for using BrainMass.com. Have a great day!

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Disposal of Plant Assets

E 14. Samson Company purchased a computer on January 2, 2009, at a cost of $1,250. The computer is expected to have a useful life of five years and a residual value of $125. Assume that the computer is disposed of on July 1, 2012. Record the depreciation expense for half a year and the disposal under each of the following assumptions:

1. The computer is discarded.
2. The computer is sold for $200.
3. The computer is sold for $550.

Natural Resource Depletion and Depreciation of Related Plant Assets

E 15. Nelson Company purchased land containing an estimated 2.5 million tons of ore for a cost of $4,400,000. The land without the ore is estimated to be worth $250,000. During its first year of operation, the company mined and sold 375,000 tons of ore. Compute the depletion charge per ton. Compute the depletion expense that Nelson should record for the year.

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