Accounting: Disposals of asset?

Question

Hi,
What is the difference between a total gain/loss on all disposals and the total proceeds received on all disposals?

Answer 1

Proceeds on disposals is the cash received from the transaction. The Gain/Loss is recorded as the cash received less the remaining book value of the assets disposed. If the cash received is less than the book value, the entry will be as follows:

Fixed Assets Cr
Cash Dr
Loss (IS) Dr remaining balance

If the proceeds are more than book value, the remainder will be a credit balance.

If the transaction involves the trading of assets rather than the receipt of cash, things get a lot more complicated. I'll assume you don't need that information.

Answer 2

the total gain/loss is the difference between the proceeds received and the adjusted basis of the asset. Proceeds would generally be cash, but would also include notes receivable or any other property received. Total proceeds would indicate the proceeds from any or all disposals.

Answer 3

total proceeds = total money received
total gain = total money received - total book value
book value = original cost - total depreciation

(The gain might be a loss if the book values are higher.)