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IAS 39 Financial Instruments: Recognition and Measurement. Accounting. Disposal of Fixed Assets Journal Entries. Disposal of a fixed asset is the withdrawal of a fixed asset from use upon the completion of its useful life or due to lower productivity in its later life.

Disposal of Fixed Assets Journal Entries

Disposal of an Asset with no Salvage Value In a rare situation where the salvage value of the fixed asset is zero, there will be no terminal cash flow and the journal entry will be as follows: Gain on Disposal However, if an asset has a salvage value; it is likely that the disposal will cause gain or loss. When a fixed asset is sold at a price higher than its carrying amount at the date of disposal, the excess of sale proceeds over the carrying amount is recognized as gain. Example On January 1, 2006 Company A purchased equipment worth of $2 million.

The company charges depreciation expense of (2,000,000 − 200,000) ÷ 5 or $360,000 each year. The equipment account and the related accumulated depreciation account are written off in the process of disposal and the gain is reported in income statement. Loss on Disposal. Standard Costing -

Standard costing means assigning the expected, budgeted costs to the goods manufactured, the goods in inventory, and the goods sold.

Standard Costing -

In other words, the amounts assigned are the costs that should occur when manufacturing products. The actual costs are then compared to the standard costs and any differences are reported as variances. Since the standard costs are often tied to the company's annual profit plan, a variance is also an indicator that the actual profit will be different from the planned amount. To illustrate standard costs, let's assume that a company's profit plan includes a standard of 15 pounds of material at $4 per pound for each unit produced. The standard for the direct labor is 30 minutes at $12 per hour for each unit manufactured. If the company manufactures 100 units and uses 1,550 pounds of material, there will be an unfavorable direct material usage variance of $200. There are similar calculations for the direct labor. Linear programming: Simplex method example. Example (part 1): Simplex method Solve using the Simplex method the following problem: Are considered the following phases: 1.

Linear programming: Simplex method example

Turning the inequalities into equalities Introduce a slack variable for each constraint of the type ≤ to turn them into equalities, giving the following linear equation system: 2. 3. In columns will appear all basic variables of the problem and the slack/surplus variables. 4. When at the Z row there aren't negative values, the optimal solution of the problem has been reached. Ci_nov_02_p24-25. CVs.

General Accounting

Concept-Break Even Analysis with Multiple Products. Learning Objectives: Calculate break even point when a company sells more than one product. Sale mix–Definition and Explanation of the Concept: The term sale mix refers to the relative proportion in which a company’s products are sold. The concept is to achieve the combination, that will yield the greatest amount of profits. Most companies have many products, and often these products are not equally profitable. Changes in sales mix can cause interesting variation in profits. Sales Mix and Break Even Analysis: If a company sells multiple products, break even analysis is somewhat more complex than discussed in the topic break even point calculation. Example:1 $60,000 sales represent the break even point for the company as long as the sales mix does not changes.

Example:2 Although sales have remained unchanged at $100,000, the sales mix is exactly the reverse of what it was in example1, with the bulk of sales now coming from the less profitable product A. Other Related Accounting Articles: Process Costing Cost Accounting : Study Notes, Problems Solutions, Question Answers. CIMA - Chartered Institute of Management Accountants.

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