357 Accumulated Depreciation of IT - Hardware

Liabilities

Contra Assets

Synopsis

Account 357 is established to record the total Depreciation applied to computer Hardware owned by the dealership and used in the automobile business.

Debits

Credits

  1. The total amount of Depreciation applied to IT Hardware when the Hardware is sold or otherwise disposed

 

  1. The monthly provision for Depreciation applied to IT Hardware

Example 1

Record the monthly provision of $3,360 for depreciation on IT Hardware.  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

$605

 

Account 091-02

Depreciation – Equipment – Used Vehicles Department

$504

 

Account 091-03

Depreciation – Equipment – Lease & Rental Department

$117

 

Account 091-04

Depreciation – Equipment – Finance & Insurance Department

$151

 

Account 091-05

Depreciation – Equipment – Mechanical Department

$638

 

Account 091-06

Depreciation – Equipment – Body Shop Department

$336

 

Account 091-07

Depreciation – Equipment – Parts & Accessories Department

$505

 

Account 091-09

Depreciation – Equipment – General & Administrative

$504

 

Account 357

Accumulated Depreciation – IT Hardware

 

$3,360

Example 2

Record the disposition of old computers that were removed from service.  The original fixed asset value is $7,000 and the depreciation to date is $6,597.  The resulting “write off” is $403.

Journal: General Journal

Entry:

 

Debit

Credit

Account 357

Accumulated Depreciation – IT Hardware

$6,597

 

Account 955

Other Deductions

$403

 

Account 287

IT- Hardware

 

$7,000

Note:

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