296 Other Investments and Miscellaneous Assets
Assets
Other
Synopsis
Account 296 is established to record the amount of Other Investments and Miscellaneous Assets owned by the dealership.
Debits |
Credits |
|
|
Example 1
Record the investment in a new subsidiary in the amount of $2,000,000.
Journal: Cash Disbursements
Entry: |
|
Debit |
Credit |
Account 296 |
Other Investments & Miscellaneous Assets |
$2,000,000 |
|
Account 202 |
Cash in Bank |
|
$2,000,000 |
Example 2
Record the reclassification of the $15,000 deposit on a new telephone system to the purchase price of $175,000.
Journal: Cash Disbursements and Purchase
Entry: |
|
Debit |
Credit |
Account 284 |
Furniture & Fixtures |
$175,000 |
|
Account 202 |
Cash in Bank |
|
$160,000 |
Account 296 |
Other Investments & Miscellaneous Assets |
|
$15,000 |
Comments
A debit balance represents the book value of assets not used in the business and not otherwise provided for.
Note:
1. Cost of assets should include additional items such as:
a. Expenses incidental to securing title
b. Installation and construction costs
c. Freight
d. Sales Tax
2. A detail of these assets should be made in this account or in a suitable subsidiary record.
3. Income and expenses relating to these assets should be recorded in Account 905, Other Income or Account 955, Other Deductions, as applicable.
4. Sub-accounts should be created to record each investment or asset separately. This should be done to facilitate administrative control over the items that are included in this account. Professional tax and accounting advice should be obtained regarding the depreciation, write-down or liquidation value of these assets.