Disposal of fixed asset

[Jim & Grace Flowers]

When recording the depreciation for the year, it should be:

Depreciation Expense		xxxx
Accumulated Depreciation		xxxx

Accumulated Depreciation is not an expense account.  It is called an asset
contra account, in accounting terms.  This means the asset account will
always show the purchase price.  The accumulated depreciation account has a
balance opposite of the asset account.  Therefore, you subtract the
accumulated depreciation amount from the asset to determine its current
value.  Depreciation Expense is a temporary account.

The answer to your last question is yes, as shown above.

-----Original Message-----
From: Axel Essbaum [mailto:axelessbaum at gmail.com] On Behalf Of Axel Essbaum
Sent: Tuesday, February 28, 2012 10:38 AM
To: dondiegoflores at verizon.net
Cc: stepbystepfarm at mtdata.com; gnucash-user at gnucash.org
Subject: Re: Disposal of fixed asset


I have been recording the depreciation annually.  The "Asset: old computer"
account started at 800 in 2009 and is now at 161.  So I need to remove 161
from it to be at 0.

Is the Accumulated Depreciation account below an Expense account?  Is it a
temporary account for use when disposing of an asset or are you suggesting I
log all ongoing depreciation there.?

On Feb 28, 2012, at 16:15, Jim & Grace Flowers wrote:

> One way to do this, especially since it is business related is as follows:
> 				
> 						Deposit
> withdrawal
> Asset:bank account			$200
> Accumulated Depreciation		 639
> Asset:old computer							$800
> Income:sale of old computer						  39
> 
> For business purposes, you have remove the asset at the price you paid,
plus
> any accumulated depreciation.  I assume you have been recording the
> depreciation.  If not, then your way will work.
> 
> Jim Flowers
> -----Original Message-----
> From: gnucash-user-bounces+dondiegoflores=verizon.net at gnucash.org
> [mailto:gnucash-user-bounces+dondiegoflores=verizon.net at gnucash.org] On
> Behalf Of Mike or Penny Novack
> Sent: Tuesday, February 28, 2012 7:38 AM
> To: Axel Essbaum
> Cc: gnucash-user at gnucash.org
> Subject: Re: Disposal of fixed asset
> 
> Axel Essbaum wrote:
> 
>> On Feb 28, 2012, at 8:01, Stein Erik Berget wrote:
>> 
>> 
>> 
>>> On Mon, 27 Feb 2012 17:57:44 +0100, Axel Essbaum <axel at essbaum.com>
wrote:
>>> 
>>> 
>>> 
>>> 
>>>> Details:
>>>> 
>>>> I have an old laptop for my business.  It was purchased for $800 on
> 1.1.2009.  Its value today (after depreciation) is $161.  I just sold it
for
> $200.  I understand I have $39 of profit but I really have no idea how to
> record it.  Is the $200 considered income?  Like, should it come from a
> "Sale of assets" income account?
>>>> 
>>>> 
>>> I'm not an accountant, but I would do it like this:
>>> 
>>> As seen from the 'bank account':
>>> 			Deposit		Withdraw
>>> asset:bank account: 	$200
>>> asset:oldcomputer:                	$161
>>> income:sold off asset:					  $39
>>> 
>>> 
> I'm not an accountant either but ............. (and why we should only 
> be giving "how to do using gnucash" as opposed to "how to do using any 
> form of bookkeeping")
> 
> You need to keep separate income/expense from capital gains as opposed 
> to income/expense from normal operations because you need that 
> separation for tax purposes.
> 
> I'm going to point something out here. Basic accounting texts may show 
> only one account used where we would use two, That's because in old 
> fashioned pen and ink on paper bookkeeping it's easy with one account to 
> have the totals for both sides of that ledger account. No automatic 
> balance at each transaction and whether the (actual) net balance is 
> debit or credit doesn't matter (in other words, just determines whether 
> a net income or a net expense). With a autobalancing software easier to 
> have two account.
> 
> Michael
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--
Axel Essbaum
axelessbaum at gmail.com