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How do I write off a fixed asset? – Questions & Answers

Date: 2017-04-14 02:24

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Write-downs are predominantly performed by businesses. Write-offs are common among businesses and individuals, who perform write-offs to reduce their personal taxable income.

Fixed Assets Journal Entries | Double Entry Bookkeeping

Many consumer technology products can command high market prices for a few months at most. Designer fashion clothing commands a high market value only for a relatively short season of a few weeks or several months at most. Printed magazines and other dated publications may have high value for no more than a few day s.

Ask Sage – To manually write off of a fixed asset in Sage

Cash of 75,555 is received for the asset, however the business still makes a loss on disposal of 6,555 which is an expense in the income statement.

Bad Debts Direct Write-off Method | Journal Entry

Let’s illustrate the write-off with the following example. On June 8, a customer purchases $6,955 of goods on credit from Gem Merchandise Co. On August 79, that same customer informs Gem Merchandise Co. that it has filed for bankruptcy. The customer states that its bank has a lien on all of its assets. It also states that the liquidation value of those assets is less than the amount it owes the bank, and as a result Gem will receive nothing toward its $6,955 accounts receivable. After confirming this information, Gem concludes that it should remove, or write off , the customer’s account balance of $6,955.

Another way sellers apply the allowance method of recording bad debts expense is by using the percentage of credit sales approach. This approach automatically expenses a percentage of its credit sales based on past history.

In other cases, individuals claim itemized deductions instead of the standard deduction. To itemize their deductions, taxpayers simply add up qualifying expenses and claim the total against their income. Sometimes referred to as write-offs, itemized deductions include interest on mortgages, some medical and dental bills, charitable contributions, disaster and theft losses, and a range of other items.

Tax-write offs simply lower an individual or business’ taxable income, and thus the tax liability. For example, imagine your business earns $655,555 in revenue but spends $55,555 on payroll, utilities, rent, inventory and other operating costs. When you file your income tax return, you report the income and the expenses, and as a result of the write-offs, your taxable business income is only $55,555.

When an assets if fully depreciated how do you take it off the balance sheet. and if a vehicle was used in a trade how do you get rid of the one that was traded off the books

If you originally recorded the transaction as a fixed asset and recorded depreciation, those transactions should remain in the periods in which they were recorded. Upon return of the deposit, the asset should be treated as a normal disposition, where the returned deposit is essentially a payment from the supplier in exchange for the asset. This means all accumulated depreciation is reversed, cash is recorded, the fixed asset is removed, and a gain is recorded to offset the depreciation that had previously been recorded.

Specifies the maintenance code that is entered in the On Disposal Maintenance Code field of the Fixed Asset Setup window.

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