083 Depreciation – Buildings and Improvements
Expenses
Fixed
Synopsis
Account 083, Depreciation – Buildings and Improvements is established to record the monthly provision to Depreciate Building and Improvements used in the dealership’s auto business.
Debits |
Credits |
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Example 1
Record the monthly depreciation expense of $10,150 for the building and improvements. The $10,150 is distributed to each department as shown in the example below.
Journal: Standard Entries Journal
Entry: |
|
Debit |
Credit |
Account 083-01 |
Depreciation – Buildings & Improvements – New Vehicles Department |
$2,132 |
|
Account 083-02 |
Depreciation – Buildings & Improvements –Used Vehicle Department |
$1,522 |
|
Account 083-03 |
Depreciation – Buildings & Improvements – Lease & Rental Department |
$203 |
|
Account 083-05 |
Depreciation – Buildings & Improvements – Mechanical Department |
$1,929 |
|
Account 083-06 |
Depreciation – Buildings & Improvements – Body Shop Department |
$1,015 |
|
Account 083-07 |
Depreciation – Buildings & Improvements – Parts & Accessories Department |
$1,827 |
|
Account 083-09 |
Depreciation – Buildings & Improvements – General & Administrative Department |
$1,522 |
|
Account 351 |
Accumulated Depreciation – Building & Improvements (Auto Business Only) |
|
$10,150 |
Distribution of Expenses
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Departmental Distribution |
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083 Depreciation – Buildings and Improvements |
New Veh. |
Used Veh. |
Lease & Rental |
Mechanical |
Body Shop |
Parts & Access. |
Gen & Admin. |
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01 |
02 |
03 |
05 |
06 |
07 |
09 |
Main building which all departments occupy |
Relative value factor |
Relative value factor |
Relative value factor |
Relative value factor |
Relative value factor |
Relative value factor |
Relative value factor |
Separate body shop |
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Total expense |
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Separate used car office building |
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Total expense |
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Comments
The monthly provision to Depreciate Buildings and Improvements should be pro-rated to each Department using the relative value factor method. The exception is when a Department occupies a completely separate facility such as an off-site used vehicle lot. For these exceptions, the entire monthly depreciation is charged to the benefiting Department.