Accounting Principles

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86 ACCOUNTING PRINCIPLES Charges for increasing or extending the operations of a concern may properly include any charge made for new equipment which is to be used in addition to all other equipment; or for new equipment which is to be used in place of some old equipment, in which case the book value of the old equipment is eliminated from the Cap- ital Assets and the cost price of the new is substituted; or for the residual value of old equipment which has been converted into use again.
Capita
...l Assets should be reduced on the books of a concern at any time that a portion of the assets are dis- posed of and also from year to year to provide for de- preciation. The amount written off at the time of sale should represent the book value of the asset, viz. , the purchase price less deductions already made or allowed for depreciation. The difference between this sum and the Selling Price should be adjusted through the Undi- vided Profits or Surplus account as affecting prior years. The amount allowed for depreciation from year to year should represent the decrease in value of the asset due to w r ear and tear, obsolescence and effluxion of time.

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