These slides are a brief summary of how to deal with transactions that affect the disposal of fixed assets

1. DISPOSAL OF
FIXED ASSETS

2. HAVE YOU EVER WONDERED
WHAT BUSINESSES DO WITH
THOSE FIXED ASSETS THEY
NO LONGER NEED ???

3. WELL THEY DO THAT
THROUGH WHAT WE CALL
ASSET DISPOSAL/THE
DISPOSAL OF FIXED ASSETS

4. REASONS BEHIND DISPOSING FIXED
ASSETS:
The asset may be old and there is a newer
model in the market
The business may be in need of cash
Can you think
of other
reasons as
well???

5. WAYS OF DISPOSING ASSETS
Cash
sale
Trade-in
Credit
sale

6. HOW DO WE TREAT AN
ASSET DISPOSAL
TRANSACTION?
WELL, WE SUGGEST YOU FOLLOW THE 4 SIMPLE STEPS
IN THE FOLLOWING SLIDE

7. 1. Close the Asset Account to the Asset Disposal Account
2. Close the Accumulated Depreciation Account of the Asset to the
Asset Disposal Account
3. Record the Sales Price (or Trade-In value) of the Asset
4. Determine the Profit/Loss made on the sale or trade-in of the
Asset