351 Accumulated Depreciation of Buildings and Improvements

Liabilities

Contra Assets

Synopsis

Account 351 is established to record the total Depreciation applied to Buildings and Improvements used by the dealership in the automobile business.

Debits

Credits

  1. Accumulated depreciation of buildings and improvements sold and otherwise disposed of

 

  1. Monthly provision for depreciation

Example 1

Record the monthly depreciation expense of $10,150 for building and improvements.  The depreciation expense is pro-rated 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

Example 2

Record the write-off of $18,364 for landscaping that was destroyed by a snowstorm.  The dealership owns the building & improvements.  The depreciation is $5,814 and the casualty loss is $12,550.

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 credit balance represents the accumulated depreciation of buildings and improvements used in the operation of the business. 

Note:

Professional tax and accounting advice should be obtained regarding the proper method of depreciation, which can be applied to Buildings and Improvements.