How to account for sale of equipment (asset)

Sandro's Avatar

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 Mathew on 05 Nov, 2015 09:13 AM

    Mathew's Avatar

    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

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

    Sandro Tasso's Avatar

    Perfect thank you very much!

    Kind regards

    Sandro

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

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