352 Accumulated Depreciation of Machinery and Shop Equipment

Liabilities

Contra Assets

Synopsis

Account 352 is established to record the total Depreciation applied to Machinery and Shop Equipment used by the dealership in the automobile business.

Debits

Credits

Accumulated depreciation of machinery and shop equipment sold and otherwise disposed of

Monthly provision for depreciation

Example 1

Record the monthly provision of $4,490 for depreciation of machinery and equipment. The monthly expense is pro-rated between the Mechanical and Body Shop departments as shown in the example below.

Journal: Standard Entries Journal

Entry:		Debit	Credit
Account 091-05	Depreciation Equipment – Mechanical Department	$2,596
Account 091-06	Depreciation Equipment – Body Shop Department	$1,894
Account 352	Accumulated Depreciation – Machinery & Equipment		$4,490

Example 2

Record the disposal of obsolete diagnostic equipment. The original cost is $5,000 and the depreciation is $3,438 resulting in a “write off” of $1,562.

Journal: General Journal

Entry:		Debit	Credit
Account 352	Accumulated Depreciation – Machinery & Shop Equipment	$3,438
Account 955	Other Deductions	$1,562
Account 282	Machinery & Shop Equipment		$5,000

Comments

A credit balance represents the accumulated depreciation of machinery and shop equipment 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 Machinery and Shop Equipment.