355 Accumulated Depreciation of Company Vehicles

Liabilities

Contra Assets

Synopsis

Account 355 is established to record the total Depreciation applied to Company Vehicles owned by the dealership and used in the automobile business.

Debits

Credits

Accumulated depreciation of company vehicles sold and otherwise disposed of

Monthly provision for depreciation

Example 1

Record the monthly provision of $2,370 for the depreciation of company vehicles used by the Mechanical and Parts & Accessories departments. The monthly expense is pro-rated to each department as shown in the example below.

Journal: Standard Entries Journal

Entry:		Debit	Credit
Account 091-05	Depreciation – Equipment – Mechanical Department	$875
Account 091-07	Depreciation – Equipment – Parts & Accessories Department	$1,495
Account 355	Accumulated Depreciation – Company Vehicles		$2,370

Example 2

Record the transfer of the courtesy van to used car inventory. The van has an ACV of $5,500. The original cost is $24,275 and has been fully depreciated.

Journal: General Journal

Entry:		Debit	Credit
Account 240	Inventory – Used Cars	$5,500
Account 355	Accumulated Depreciation – Company Vehicles	$24,275
Account 285	Company Vehicles		$24,275
Account 905	Other Income		$5,500

Comments

A credit balance represents the accumulated depreciation of permanent company vehicles 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 Company Vehicles.