Hi, I am struggling with a new business and sage line 50.........how do I post the purchase of the Van then depreciate it for year 09-10. The Van was purchased in November 2009 for £4500 (Its an old van and all we could afford). Many Thanks
There are two ways you can do depreciation, the first is the straight line method which I think is easier to use. This is where you take the cost of the van less the salvagable amount of this van after it's useful life span and divide it by the amount of years you believe it will be usefull for.
Cost of Van - £4,500 less salvage value - (500) example after maybe 5 years of use. divided by the estimated amount of years useful - 5 years
4500-500 divided by 5 years
ans= £800 per year depreciation
Hope this makes sense as not always good at explaining things.
You can use the 00xx codes in sage to post the van to, I imagine you paid cash for it, so DR motor vehicles and CR bank
you will also have an 00xx code for motor vehicles depreciation. you will have to make a journal for depreciation - depending on whether you do monthly accounts or not - you would CR 00xx and DR 800x, which is motor vehicles depreciation also, but for the P&L.
its up to you which type of depreciation you use, as Alfred has said.
