In AC116's Unit 6 asset disposal problem, a cash sale, a trade-in and a retirement each begin with depreciation brought to date and end with a gain or loss. Searches like "ac 116 unit 6 assignment example", "ac116 unit 6 sample" and "ac116 unit 6 example" land here.
What a finished AC116 Unit 6 asset disposal problem looks like
Each disposal gets its own block with a short heading naming the asset and the event. Inside the block, a four-line computation comes first: cost, accumulated depreciation at the start of the year, depreciation for the months held this year, and book value on the disposal date. The catch-up entry follows, debiting depreciation expense for the partial year. Then comes the disposal entry itself, which debits Cash for any proceeds, debits Accumulated Depreciation for its full updated balance, credits the asset account for original cost, and balances with a gain credited or a loss debited. The trade-in block adds the new asset, recorded at the fair value given up plus cash paid. The retirement block has no proceeds line at all, so its loss equals the book value that remained.
How a AC116 Unit 6 example is structured
Blocks run from simplest to hardest: retirement, cash sale, trade-in. That order shows the same removal pattern three times with one new element added each time: first no proceeds, then cash, then a replacement asset. Within every block the sequence never changes, because the sequence is what the unit grades. Depreciation to date comes before the disposal entry since the book value on which the gain or loss depends does not exist until that expense is recorded. The gain or loss line is always the balancing figure, and a sentence under each entry states it as proceeds or fair value minus book value, so a grader can check it without reading the entry. A closing table lists all three results, and two sentences note where each gain or loss appears on the income statement.
Book value on the disposal date
Cost, accumulated depreciation brought forward, months of expense for the current year, and the resulting book value. Every later figure in the block depends on this last line.
The catch-up entry
Depreciation expense for the partial year, recorded against the contra account before anything is removed. Skipping it inflates book value and shrinks any gain.
Retirement with nothing received
Cost and accumulated depreciation removed, the remaining book value debited as a loss. The simplest block, and the one that shows the removal pattern plainly.
Sale for cash
Proceeds debited to Cash, both asset accounts cleared, and the balancing amount recorded as a gain or a loss. A sentence restates it as proceeds minus book value.
Trade-in for a newer model
Old asset cleared, new asset recorded at the fair value of what was surrendered plus the cash paid, and the difference from book value reported as gain or loss.
Where marks go in AC116 Unit 6
The loss that recurs every term is the disposal recorded without the catch-up entry. Accumulated depreciation stays understated, book value stays too high, and the gain shrinks or a loss appears that should not exist. Graders find it by recomputing book value at the sale date. The second deduction is a netted entry, crediting the asset for book value instead of removing cost and accumulated depreciation separately, which leaves balances on the ledger for an asset the business no longer owns. Trade-ins lose points when the new asset is recorded at its list price rather than at the fair value exchanged. Gains credited to revenue instead of a separate gain account, and losses buried in depreciation expense, cost smaller amounts in most sections.
Get a AC116 Unit 6 example written to your instructions
Dates are what this problem turns on, so send the disposal dates, proceeds and trade-in terms from Unit 6 along with the depreciation method already in use, the instructions and the rubric. Worked blocks for each disposal return inside 24-48h, catch-up entries included. The first custom sample is free and uses your section's figures rather than a textbook's.
AC116 Unit 6 questions, answered
What if the asset is sold on the first day of the year?
Then no catch-up entry is needed, because the prior year-end adjustment already brought accumulated depreciation current. The sample still shows the four-line computation with a zero on the current-year line, so the question visibly received attention rather than being skipped. Problems in AC116 sometimes set one disposal on the first day of the year for exactly that reason.
Is a trade-in gain always recognized?
At this level, most AC116 problems assume the exchange has commercial substance, meaning future cash flows change as a result, and then the gain or loss is recognized in full. Where a problem states that the exchange lacks commercial substance, gains are generally deferred into the new asset's cost instead, while losses are still recognized. The sample follows the assumption the problem makes and names it.
Where does the gain or loss appear on the income statement?
Below operating income in most textbook formats, under other revenues and gains or other expenses and losses, because selling equipment is not the business's main activity. The sample's closing sentences place each result there and note that a large gain can make a weak operating year look stronger than it was, which is the interpretive point many rubrics reward.