How To Calculate Proceeds From Sale Of Property Plant And Equipment. Cash inflow from sale of Land Decrease in Land BS Gain from Sale of Land 80000 70000 20000 30000. Next subtract accumulated depreciation from the result.
Disposal of plant assets can occur through the retirement of discarded assets sales involuntary conversions or trade-insNo matter how the disposal is accomplished the accounting procedures are quite similar. No proceeds fully depreciated. Next subtract accumulated depreciation from the result.
Any remaining difference between the two is recognized as either a gain or a loss.
Debit cash for the amount received debit all accumulated depreciation debit the loss on sale of asset account and credit the fixed asset. What is Property Plant and Equipment PPE. Subtract this carrying amount from the sale price of the asset. To illustrate accounting for the sale of a plant asset assume that a company sells equipment costing 45000 with accumulated depreciation of 14000 for 28000 cash.