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Accounting, Payroll & Pension Issues/Expenditure on fixed assets
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Question
How do i treat the purchase of a used spare part for an equipment eg CAT BULLDOZER.
Eg. purchased an equipment part for $ 2,000.00
Generally, the transaction would be:
Fixed assets $2,000 debit
Cash $2,000.00 credit
For the purchase of an assets of this amount, it probably should be capitalized. Then it would be depreciated once it is placed in use. Until it is used, it just sits in the fixed asset account.
Make sense??
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Accounting, Payroll & Pension Issues
Answers by Expert:
Arthur Naman
Expertise
General accounting and bookkeeping questions. How to do monthly bookkeeping, how to prepare financial reports. How to reconcile accounts.
I cannot answer questions pertaining to pension or retirement planning.
This is not a forum to have homework answered. Please do your own homework.
Experience
30 years' experience doing tax and accounting work
Education/Credentials
MPA from Univ. of Texas at Austin, MBA Golden Gate Univ, San Francisco CA
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