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How to account for sale of equipment (asset)

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Sandro

04 Nov, 2015 10:24 AM

Hello,

I need some help... I have one of my cameras purchase value say 10 then after 2 years I sell it for 5 how do I register this?
Thank you!
Sandro

1. Support Staff 1 Posted by Admin on 05 Nov, 2015 09:13 AM

   

   Hi Sandro,

   This sounds like a case of a purchase and a sale. Assuming you deal with it in cash (not customer/supplier accounts) here's a quick example. You should contact your accountant for help if you're not sure what's going on, as I can't offer you any bookkeeping or accounting services.

   Here's a transaction that might serve as an example purchase:
   Date = (date of purchase)
   Account 1 = Bank account
   Transaction Type = Out (Paid)
   Account 2 = Equipment (an asset account)
   Amount = (purchase amount)

   ...and here is a sale: Date = (date of sale)
   Account 1 = Bank account
   Transaction Type = In (Received)
   Account 2 = Disposal of assets (an income account)
   Amount = (sale amount)

   Now you've sold the asset you will need a third transaction which devalues the stock you have in the business. The amount is the original cost minus any devaluations you might have entered already.
   Date = (date of sale)
   Account 1 = Equipment (the asset account)
   Transaction Type = Depreciation
   Account 2 = Cost of sales (under Direct Expenses)
   Amount = (current book value)

   I hope that helps,

   Mathew

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2. 2 Posted by Sandro Tasso on 05 Nov, 2015 05:25 PM

   

   Perfect thank you very much!

   Kind regards

   Sandro

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3. Admin closed this discussion on 05 Nov, 2015 05:47 PM.