What is depreciation? The depreciation schedule and calculator.
Автор: Wayne3287w
Загружено: 2020-12-13
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Explains depreciation and useful life. Who should prepare the depreciation schedule?
Free Depreciation calculator online for students and business owners. Gain or Loss on sale.
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This video is for educational purposes only. None of the statements in this video are a recommendation or advice. You should obtain professional assistance before making any commercial decisions.
AASB 116
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Useful life is the estimated lifespan of a depreciable fixed asset, during which it can be expected to contribute to company operations.
The depreciation and capital allowance tool will help you calculate the deduction available from a depreciating asset, or claims you are entitled to for capital allowance and capital works purposes.
This is an example discussed in the video.
https://www.ato.gov.au/calculators-an...
Depreciation Useful life
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Example
On 31 December 2023, Newmark Pty Ltd sold their photocopier for $4,950 cash including GST. $4950/11 = $450 GST. The company received $4,950 in cash. Hence, “cash at bank” is debited for this amount. The asset account “photocopying machine” is credited for its original GST-exclusive cost of $12,000. “Accumulated depreciation” up to the date of the sale (i.e. 31 December 2023) is debited for $8,000. The difference between the GST-exclusive cost of the asset of $12,000 and its accumulated depreciation of $8,000 as at 31 December 2023 is therefore $4,000. This is effectively the asset’s carrying amount as at the date of sale.
Journal Entry
Cash at bank Dr 4,950
Accumulated Depreciation Photocopier Dr 8,000
Photocopies at cost Cr 12,000
GST Payable Cr 450
Gain on Sale (Revenue) Cr 500
Loss on Sale
In this instance, on 31 December 2023, Newmark Pty Ltd sold their photocopier for $3,850 (GST-inclusive). Hence, “cash at bank” is debited for this amount. The asset account “photocopying machine” is credited for its original cost (ie $12,000) and accumulated depreciation up to the date of the sale (ie 31 December 2023) is debited for $8,000. Once again, the carrying amount of the photocopier as at 31 December 2023 is $4,000.
Newmark Pty Ltd is required to include an amount of $350 (being $3,850 × 1/11th) in its December 2023 BAS.
The “GST payable” account is credited for $350. The “loss on sale” of the photocopier is shown as an expense in the profit and loss statement $500.
Journal Entry
Cash at bank Dr 3,850
Accumulated Depreciation Photocopier Dr 8,000
Loss on Sale Dr 500
Photocopies at cost Cr 12,000
GST Payable Cr 350
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