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Bookkeeping - What to do when an asset is sold, with the Asset Value and Accumulated Depreciation?
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Published on Monday, 06 October 2014 18:50
You have just sold an asset, eg truck, so you generate an Invoice for the buyer, allocating to the Asset account for the item in Balance Sheet, and process as per a normal sale.
The next question is what to do with Asset Value and Accumulated Depreciation on the Balance Sheet?
Create a General Journal reducing the Fixed Asset Balance and any Accumulated Depreciation to $0, and the net amount will still need to be allocated. This will be the difference between the Sales Price and the value of the truck (Fixed Asset minus Accumulated Depreciation in some cases) and will be either a Gain or Loss – usually it goes to the Net Sale/Loss of Asset Income.
Your accountant will check and sort out the transactions at year end.
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