281 Building and Improvements - Auto Business Only
Assets
Fixed
Synopsis
Account 281 is established to record the acquisition cost of Building and Improvements purchased by the dealership and used in the automobile business.
Debits |
Credits |
|
|
Example 1
Record the $4,267,000 cost of construction of the new dealership building.
Journal: Cash Disbursements and Purchase
Entry: |
|
Debit |
Credit |
Account 281 |
Buildings & Improvements (Auto Business Only) |
$4,267,000 |
|
Account 202 |
Cash in Bank |
|
$4,267,000 |
Example 2
Record the cost of $5,814 for write-off of landscaping that was destroyed by a snowstorm and $12,550 in Other Deductions. The dealership owns the building & improvements for the amount of $18,364.
Journal: General Journal
Entry: |
|
Debit |
Credit |
Account 351 |
Accumulated Depreciation – Buildings & Improvements |
$5,814 |
|
Account 955 |
Other Deductions |
$12,550 |
|
Account 281 |
Buildings & Improvements (Auto Business Only) |
|
$18,364 |
Comments
A debit balance represents the cost of buildings and improvements situated on land owned by the dealership.
Note:
ONLY ASSETS USED IN THE OPERATION OF THE DEALERSHIP BUSINESS SHOULD BE INCLUDED IN THESE ACCOUNTS.
Cost of assets should include additional items such as: