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 |
|
|
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.