SPECIAL ACCOUNTS AND ENTRIES 123 



If it is sold for $7000 the entry is: 



Cash $7,000 



Loss and Gain 1,000 



Land $8,000 



If one-half of the area is sold for $5000, assuming it is 

 of uniform value, the entry is : 



Cash $5,000 



Land $4,000 



Loss and Gain 1,000 



This leaves the Land account with a debit balance of 

 $4000, representing the book value of the half remaining 

 unsold. The profit of $1000 is made on the part sold. 



Buildings. Buildings account is debited with the cost 

 of buildings at the time of erection, the appraised value 

 at time of opening books or at time of inheritance in ac- 

 cordance with the principles stated for Land account. The 

 same principles also apply for repairs, additions and re- 

 placements, and for sale of structures. 



The principal points of difference between Land and 

 Building accounts are appreciation and depreciation. The 

 question of appreciation seldom, if ever, arises in connec- 

 tion with buildings. The matter of depreciation, however, 

 does arise. That is the principal reason for keeping land 

 and buildings under separate accounts. 



Depreciation is discussed under separate title later in 

 this chapter. Building depreciation is taken up there 

 briefly, although it does not call for much special com- 

 ment. It should be stated, however, that the common 

 statement so often made in connection with farm records, 

 that "depreciation of buildings is offset by appreciation 

 in land" is not upheld by scientific principles of account- 

 ing. 



Mixed Accounts in a Trading Business. The class of 



