Chapter 9: PPE

Question 1

Capitalized Journal entry (PPE)

Answer 1

PPE Dr (A+) & Cash Cr (A-)

Question 2

Expense (non-attributable) Journal entry

Answer 2

Expense Dr (E-) & Cash Cr (A-)

Question 3

Depreciate PPE Methods

Answer 3

• Straight line
• Units of Activities
• Double declining balance

Question 4

Straight Line Method (depreciation expense)

Answer 4

Depreciation expense = Cost - residual/useful life

Cost -Residual = total depreciation amount

Question 5

Units of activity

Answer 5

Depreciation expense= depreciation per unit x units produced

Depreciation per unit= cost - residual/nb of units makeable

Question 6

Double declining balance

Answer 6

Depreciation rate = 2/useful life

Depreciation expense= book value t-1 x depreciation rate

The remaining useful life = accumulated depreciation - residual value = left to depreciate

Left to depreciate/expense = years left

Question 7

Revaluation of PPE: GAIN

Answer 7

Accumulated Depreciation Dr (A+) & Cr:
PPE (A-), Revaluation Surplus (E+)

Question 8

Revaluation of PPE: LOSS

Answer 8

Accumulated Depreciation Dr (A+) & CR:
PPE (A-), Impairment Loss (E-)

Question 9

Fully Depreciated PPE

Answer 9

Accumulated Depreciation Cr (A+) & PPE Cr (A-)

Question 10

Non-fully Depreciated PPE

Answer 10

Dr : Acc. Depreciation (A+), Loss on disposable (E-)
Cr: PPE (A-)

Question 11

Gain on Sale PPE

Answer 11

Dr: Acc. Depreciation (A+), Cash (A+)
Cr: PPE (A-), Gain on sale (E+)

Question 12

Loss on Sale PPE

Answer 12

Dr: Acc. Depreciation (A+), Cash (A+), Loss on sale (E-)
Cr: PPE (A-)