Take a free trial of Clear Books Or take a look at our new product Clear Books Micro

selling business equipement

Question asked by Alan Bennett 3 years ago

I am selling business equipment so that I can use the proceeds to do a part exchange on new equipment.

How the hell is that shown in Clearbooks?

ALAN

2 Replies

Hi Alan,

In this case, on disposal of a fixed asset, the cost is transferred from the fixed asset account to an asset disposal account. This disposal account will consist of accumulated depreciation, proceeds of sale and the cost of the asset; which would then be transferred to the P&L. You would have to create a disposal account if this does not exist already by heading to Settings > Accounting > Account Codes > Create Account Code.

1) The first journal should be as follows:

Debit Accumulated Depreciation (Plant & equipment acc dep) Credit Disposal of Business Equipment

This would transfer aggregate depreciation for the asset up to date to the Disposal account.

2) The second journal would transfer the cost of the asset to the Disposal account:

Debit Disposal of Business Equipment Credit Business Equipment (Asset)

3) Lastly, you should then record the sale of the asset by using the Money In feature for the relevant bank account.

The journal should look something like this:

file

You can then raise a bill for the new part exchange.

Please let me know if there are any further queries.

Thanks,

Tommy

Thanks for such a thorough answer Tommy.

Reply to this question

Attach images by dragging and dropping or upload
 

Your comments will be public and can be answered by anyone in the Clear Books community.

Find out what we do and who we are