I need some advice please regarding assets and depreciation.
My accounts are showing my assets ( i.e. computer bought 5 years ago) with a Dr value of £500.00 and the depreciation on this as Cr value of £500.00, which seem to balance each other out. Should I write these figures out of my accounts now and how do I do this. I am still using the computer at the moment and will be upgrading it later in the year.
Your accounts are showing that your computers value has now depreciated down to zero, so as far as the accounts are concerned it is no longer worth anything, but I'm sure that it is to you! When you upgrade later in the year the asset account will once again show a higher figure than the depreciation account.
Personally I would leave the balances as they are and continue to carry them forward, the accounts then show a lifetime (businesstime!) history of the account. If you really wanted to tidy it off you would transfer the balance of the depreciation account to the asset account thus leaving both accounts at zero.
Hope this helps.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
the balances in your accounts will stay there until you dispose of them then you do a journal Cr Fixed Assets use cost price £500 Dr sale of asset (4200) with cost price £500 Cr sale of asset (4200) with depr value £500 CR sale of asset (4200) use the price you sold item for I.E £50 Dr bank with sale price £50
difference in 4200 sale of asset will be the profit or loss
