287 Information Technology - Hardware

Assets

Fixed

Synopsis

Account 287 is established to record the acquisition cost of Information Technology computer hardware purchased by the dealership and used in the automobile business.

Debits

Credits

  1. The Cost of IT Hardware

 

  1. The cost of IT Hardware when sold or otherwise disposed

 

Example 1

Record the purchase of personal computers for the accounting office in the amount of $4,500.

Journal: Cash Disbursements and Purchase

Entry:

 

Debit

Credit

Account 287

IT – Hardware

$4,500

 

Account 300

Accounts Payable – Trade Creditors

 

$4,500

Comments

A debit balance represents the initial cost of IT Hardware including shipping costs and sales tax.

 

IT Hardware is any piece of computer equipment - whether it’s a laptop, desktop, computer monitor, mouse, keyboard, printer, etc.

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:

 

  1. Expenses incidental to securing title
  2. Installation and construction costs, including interest during construction
  3. Accessories and optional equipment
  4. Freight
  5. Sales Tax