Machinery Equipment
77
Machinery & Equipment
description
recognizing, entries,
Transcript of Machinery Equipment
Machinery equipment
Machinery & Equipment
Recognition
It may acquired through donation, transfer from another government agency, purchase or construction.
PPE are initially recognized at cost which includes the purchase price and incidental expenses such as import duties, freight, installation and any other directly attributable costs. The donated and leased property shall be based on its fair value or appraised value. There is no standard minimum length of life for the assets to be classified as PPE or plant assets but that they are normally expected to last more than one year.
AccountsAcct. codeDebitCreditMachinery1-06-05-010100,000 Accounts Payable2-01-01-10100,000MACHINERY
Accounting Code: 1-05-05-010
Normal Balance: Debit
Description: debit this to record the cost incurred in the purchase assembly or fair value, if acquired through donation of other machinery. Credits when disposal or derecognition of the carrying amount of the replaced parts in major repairs.
OFFICE EQUIPMENT
ACCOUNT NUMBER: 1-06-05-20
NORMAL BALANCE: Debit
DESCRIPTION: debit to record the cost incurred in the purchase or assembly or fair value, if acquired through donation or transfers without cost, of office equipment for use in government operations. It includes duplicating/photocopying machines, air conditioning units and the like. Credits when disposal or derecognition of the carrying amount of the replaced parts in major repairs.
Information and Communication Technology Equipment
Account NumberNormal Balance Description1-06-05-030DebitCost/Appraised value of ICT equipment and software acquiredAgricultural and Forestry Equipment
Account Number: 1-06-05-040
Normal Balance: Debit
Description: debit this to record the cost incurred in the purchase assembly or fair value, if acquired through donation of other machinery. Credits when disposal or derecognition of the carrying amount of the replaced parts in major repairs.
Marine and Fishery Equipment
Account Number: 1-06-05-050
Normal Balance: Debit
Description: debit this to record the cost incurred in the purchase assembly or fair value, if acquired through donation of other machinery. Credits when disposal or derecognition of the carrying amount of the replaced parts in major repairs.
Airport Equipment
Account Number: 1-06-05-060
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Communication Equipment
Account Number: 1-06-05-070
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Construction and Heavy Equipment
Account Number: 1-06-05-080
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Disaster Response and Rescue Equipment
Account Number: 1-06-05-090
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Medical Equipment
Account Number: 1-06-05-110
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Military, Police and Security and Equipment
Account Number: 1-06-05-100
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Technical And Scientific Equipment
Account Number: 1-06-05-140
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Sports Equipment
Account Number: 1-06-05-130
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Other Machinery and Equipment
Account Number: 1-06-05-990
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Transportation Equipment
Motor Vehicle
Account Number: 1-06-06-010
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Trains
Account Number: 1-06-06-020
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Aircrafts and Aircrafts Ground Equipment
Account Number: 1-06-06-030
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Watercrafts
Account Number: 1-06-06-040
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
Other Transportation Equipment
Account Number: 1-06-06-010
Normal Balance: Debit
Description: Cost incurred in the purchase or assembly or fair value, if donation or transfer without cost or for use in government operations.
DEPRECIATION
Accounting for Depreciation
The straight-line method of depreciation for PPE and leased property is followed and depreciation is recorded starting in the month following date of purchase.
3 factors to compute depreciation:
Asset cost
Estimated useful life expected to be used by the agency
Residual value- amount expects to obtain for the asset at the end of it useful life after deducting the expected cost of disposal.
The depreciable cost will be equal to the asset cost minus residual value.
DEPRECIATION- Machinery and Equipment
Acct. no: 5-05-01-050
Normal Balance: Debit
Description: it is used to record the periodic allocation of cost for the wear and tear of Machinery and Equipment.
Subsidiary Ledger
Depreciation- Transportation Equipment
Acct. no: 5-05-01-060
Normal Balance: Debit
Description: used to record the periodic allocation of cost for the wear and tear of transportation equipment.
Depreciation- Other Property and Equipment
Acct no.: 5-05-01-990
Normal Balance: Debit
Description: it is used to record the periodic allocation of cost for the wear and tear of the other property, plant and equipment.
Accumulated DEPRECIATION-MACHINERY
Account Number: 1-06-05-11
Normal Balance : Credit
Description: credited for the allocation of cost of machinery in accordance with prescribed policy on Depreciation.
Accumulated Impairment Loss Machinery
ACCOUNT NUMBER: 1-06-05-012
NORMAL BALANCE: Credit
DESCRIPTION: it is credited for the amount recognized to reduce machinery to its recoverable amount due to impairment. Debit this account upon disposal, derecognition of the asset or reversal of impairment.
ACCUMULATED Depreciation- OFFICE EQUIPMENT
ACCOUNT NUMBER: 1-06-05-21
NORMAL BALANCE: Credit
DESCRIPTION: IT is credited for the allocation of cost of office equipment in accordance with the prescribed policy on depreciation. Debit this account upon disposal
ACCUMULATED IMPAIRMENT LOSS- OFFICE EQUIPMENT
ACCOUNT NUMBER: 1-06-05-22
NORMAL BALANCE: credit
DESCRIPTION: it is recognized to reduce the office equipment to its recoverable amount due to impairment. Debit when upon disposal or reversal of impairment.
Accumulated Depreciation - Information and Communication Technology Equipment
Account NumberNormal Balance Description1-06- 05-031CreditAllocation of cost in accordance with the prescribed policy of depreciationAccumulated Impairment Losses- ICT
Account Number: 1-06- 05-032
Normal Balance : Credit
Description: recognized to reduce ICT equipment to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Agricultural and Forestry Equipment
Account Number: 1-06-05-041
Normal Balance : Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Agricultural and Forestry Equipment
Account Number: 1-06- 05-042
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Marine and Fishery Equipment
Account Number: 1-06-05-051
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Marine and Fishery Equipment
Account Number: 1-06- 05-052
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Airport Equipment
Account Number: 1-06-05-061
Normal Balance : Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Airport Equipment
Account Number: 1-06- 05-062
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment
Accumulated Depreciation Communication Equipment
Account Number: 1-06-05-071
Normal Balance : Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Communication Equipment
Account Number: 1-06- 05-072
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Construction and Heavy Equipment
Account Number: 1-06-05-081
Normal Balance : Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Construction and Heavy Equipment
Account Number: 1-06- 05-082
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Disaster Response and Rescue Equipment
Account Number: 1-06-05-081
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Disaster Response and Rescue Equipment
Account Number: 1-06- 05-082
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Other Machinery And Equipment
Account Number: 1-06-05-991
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Other Machinery and Equipment
Account Number: 1-06- 05-992
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Medical Equipment
Account Number: 1-06-05-111
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Medical Equipment
Account Number: 1-06- 05-112
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Military, Police and Security Equipment
Account Number: 1-06-05-101
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Military, Police and Security Equipment
Account Number: 1-06- 05-102
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Sports Equipment
Account Number: 1-06-05-131
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Sports Equipment
Account Number: 1-06- 05-132
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Technical and Scientific Equipment
Account Number: 1-06-05-141
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Technical and Scientific Equipment
Account Number: 1-06- 05-142
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Other Machinery and Equipment
Account Number: 1-06-05-991
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Other and Machinery Equipment
Account Number: 1-06- 05-992
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Motor Vehicle
Account Number: 1-06-06-11
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Motor Vehicle
Account Number: 1-06- 06-012
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Trains
Account Number: 1-06-06-021
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Trains
Account Number: 1-06- 06-022
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Accumulated Depreciation Aircrafts and Aircrafts Grounds Equipment
Account Number: 1-06-06-031
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Aircrafts and Aircrafts Grounds Equipment
Account Number: 1-06- 06-032
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment
Accumulated Depreciation Watercrafts
Account Number: 1-06-06-041
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Watercrafts
Account Number: 1-06- 06-042
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment.
Accumulated Depreciation Other Transportation Equipment
Account Number: 1-06-06-990
Normal Balance: Credit
Description: Allocation of cost in accordance with the prescribed policy of depreciation
Accumulated Impairment Losses- Other Property and Equipment
Account Number: 1-06- 06-012
Normal Balance : Credit
Description: recognized to reduce to their recoverable amount of impairment. Debit upon disposal or reversal of impairment.
Repair and Maintenance Expenses
Repair and Maintenance- Machinery and Equipment
Account Number: 5-02-13-050
Normal Balance: Debit
Description: it is used to record cost of repairs and maintenance on machineries and equipment. This account shall be closed to the Income and Expense Summary Account.
Subsidiary ledgers:
Repairs and Maintenance- Transportation Equipment
Acct. no: 5-02-13-060
Normal Balance: Debit
Description: used to record the cost of repair and maintenance of transportation equipment.
IMPAIRMENT LOSS-PPE
ACCOUNT NUMBER:5-05-03-090
NORMAL BALANCE: DEBIT
DESCRIPTION: it is used to record the loss incurred due to impairment of property, plant and equipment whose carrying amount is greater than depreciated replacement cost.
DISPOSAL OF AGENCY ASSETS
PPE are still serviceable but are no longer used shall be properly classified. This facilitates the disposal of assets that are no longer useful to the agency since the information on these assets is readily available. The assets may be disposed through sale, transfer/ donation and destruction.
DERECOGNITION
It shall be derecognized on disposal or when no future economic benefits are expected from its use or disposal.
DISPOSAL THROUGH TRANSFER OR DESTRUCTION
ACCOUNTSACCT.CODEDEBITCREDITAccumulated depreciation- medical equipment1-06-05-2090,000 Medical Equipment1-06-05-02190,000DISPOSAL THROUGH SALE
Cost of ComputersP8000Less: Accumulated Depreciation6000Book ValueP2000Cash-Collecting Officers2000Accumulated Depreciation-office Equipment6000 Office Equipment8000If the selling price is P2000
Below the book value
Cash-Collecting Officers1500Accumulated Depreciation Office Equipment6000Loss on Sale of Assets500 Office Equipment8000Higher than the book value
Cash-Collecting Officers2500Accumulated Depreciation Office Equipment6000 Gain on Sale of Assets500 Office Equipment8000
