354 Accumulated Depreciation of Furniture and Fixtures

Liabilities

Contra Assets

Synopsis

Account 354 is established to record the total Depreciation of Furniture and Fixtures owned by the dealership and used in the automobile business.

Debits

Credits

Accumulated depreciation of furniture and fixtures sold and otherwise disposed of

Monthly provision for depreciation

Example 1

Record the monthly provision of $6,445 for depreciation of furniture and fixtures. The monthly expense is pro-rated to each department as shown in the example below.

Journal: Standard Entries Journal

Entry:		Debit	Credit
Account 091-01	Depreciation – Equipment – New Vehicles Department	$1,325
Account 091-02	Depreciation – Equipment – Used Vehicles Department	$950
Account 091-03	Depreciation – Equipment – Lease & Rental Department	$675
Account 091-04	Depreciation – Equipment – Finance & Insurance Department	$425
Account 091-05	Depreciation – Equipment – Mechanical Department	$1,185
Account 091-06	Depreciation – Equipment – Body Shop Department	$275
Account 091-07	Depreciation – Equipment – Parts & Accessories Department	$350
Account 091-09	Depreciation – Equipment – General & Administrative	$1,260
Account 354	Accumulated Depreciation – Furniture & Fixtures		$6,445

Example 2

Record the trade-in of an old copier machine (original cost $5,000) with a book value of $500 for a new copier that sells for $10,000. An allowance of $750 was received for the old copier.

Journal: Cash Disbursements and Purchase

Entry:		Debit	Credit
Account 354	Accumulated Depreciation – Furniture & Fixtures	$4,500
Account 284	Furniture & Fixtures	$9,750
Account 284	Furniture & Fixtures		$5,000
Account 202	Cash in Bank		$9,250

Comments

A credit balance represents the accumulated depreciation of furniture and fixtures 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 Furniture and Fixtures.