How to remove a van from Fixed Assets
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- Location: Mountain View Presbyterian Church
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How to remove a van from Fixed Assets
We have a ten-year-old van that has been in the Fixed Assets showing a value of $25,000. The finance committee wants it "depreciated" to $0, so that it won't even show up on the Balance Sheet. What would the entry to get this accomplished look like? Thanks for any help!
Joetta
Removal of Van
There are two options from an accounting perspective. First, you will need to decide if the van was deemed fully depreciated before the current year or during the current year. This will have an impact on your entry. I'll present this as Option 1 and Option 2.
Option 1: If you decide that the church van was fully depreciated prior to 2008 then your entry to fully depreciate the asset is a Debit to your equity account (fund balance) and a Credit to your Accumulated Depreciation account related to the church van. This option has no current year impact.
Option 2: If you decide that the van will be fully depreciated during 2008, then you will need to decide how much was depreciated during 2008 (1/10 or $2,500 for example). In this case you would Debit the fund balance for $22,500, Debit depreciation expense for $2,500 and Credit Accumulated Depreciation of the van account for $25,000. In this scenario your current year expense would be $2,500
I wanted to present both options so you see the impact but for simplicity I would just do option 1 and have the entire amount be recorded as if it all happened in the prior years. I hope this helps
Option 1: If you decide that the church van was fully depreciated prior to 2008 then your entry to fully depreciate the asset is a Debit to your equity account (fund balance) and a Credit to your Accumulated Depreciation account related to the church van. This option has no current year impact.
Option 2: If you decide that the van will be fully depreciated during 2008, then you will need to decide how much was depreciated during 2008 (1/10 or $2,500 for example). In this case you would Debit the fund balance for $22,500, Debit depreciation expense for $2,500 and Credit Accumulated Depreciation of the van account for $25,000. In this scenario your current year expense would be $2,500
I wanted to present both options so you see the impact but for simplicity I would just do option 1 and have the entire amount be recorded as if it all happened in the prior years. I hope this helps
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- Posts: 62
- Joined: Fri Apr 23, 2004 9:37 am
- Location: Mountain View Presbyterian Church
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Depreciating a 10-year old Van
Thank you! Your note was very helpful. I guess what we are doing is writing off the van completely, which is the same as your Option 1. Thanks!
Joetta