Disposal of fixed asset

[zakina at nz.bluescopesteel.com]

Actually, I would have thought that your 'income' was a write back as 
'depreciation recovered' , before writing off the remaining 
accumulated depreciation.
Done like that its easy to keep track of how much you owe the tax man 
his share of the recovered depreciation.

You haven't actually made any 'profit' as you didn't sell it for more 
than 800.00.

cheers
andrew.

On 28 Feb 2012 at 11:29, Jim & Grace Flowers wrote:

> 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
> 
> 
> 
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