depreciation !!??

System

depreciation !!?? help all say i had a car and its depreciation on a year basis.

after year one where would i put the depreciation in the trial balance would i put it in
depreciation charge dr

or

would i put it accumulated depreciation and then when it was sold put the total depreciation accumulated as a dr in the trial balance

thanks

System

Re:depreciation !!??

Hey!

Ok when the car was initially purchased you would:

DR Fixed Assets
CR Bank

Then to post the depreciation each month you would:

DR Depreciation expense account.
CR Depreciation provision account.

On sale you would:

DR Bank
CR Fixed Assets

I think that is right anyway - someone correct me if I am wrong?

Do you know which method you are using, i.e. straight line or reducing balance, and how to calculate the monthly depreciation?

System

Re:depreciation !!??

Hi

On the sale of the fised asset you would create a disposal account. You would then:

DEBIT: Disposal account - cost of asset
CREDIT: Fixed asset - cost of asset

DEBIT: Depreciation provision - depreciation to date
CREDIT: Disposal account - depreciation to date

DEBIT: Bank - money received/sale value
CREDIT: Disposal - money received/sale value

The balance of the reserve would then be the profit (credit balance) or loss (debit balance) on the sale of the asset.

If the asset had been revalued at any stage, you would also:

DEBIT: Revaluation reserve
CREDIT: Disposal account

so as to recognise the full value of the asset/sale.

Neil

System

Re:depreciation !!??

thanks buddy so i was kinda right all along i just wasnt sure but always nice to get the experts confirmation.

so what about provision for depreciation adjustment ?? whats that exactly or is that just for the ETB adjustments column

thanks