281 – Buildings & Improvements

Fixed Assets

 

Synopsis

Account 281

Debits

Credits

  1. The cost of building(s) purchased or constructed for use in the automobile business.

  2. The cost of improvements, alterations, additions, and permanent fixtures attached to the building(s).

  3. The amount of legal fees, architect fees, excavating and grading costs, etc.

  1. The cost of buildings or building fixtures sold or otherwise removed from this account.

 

 

Remarks:

Buildings and improvements on leased land should be recorded in Leaseholds (Account 286).  Buildings and improvements not used in the retailer activity should be recorded in Other Non-Automotive Assets (Account 296).

 

The cost of land and buildings purchased for a lump sum should be allocated to the appropriate accounts based on an appraisal, tax assessment, or other acceptable basis.

 

Depreciable land improvements, such as grading, paving, etc., should be charged to this account.  For control purposes a sub-account or separate fixed asset record may be maintained for these improvements.

 

Repairs and maintenance costs which ordinarily do not increase the value or prolong the life of buildings and/or permanent fixtures and equipment should be expensed as they occur, using Repairs – Real Estate (Account 82) or Repairs – Equipment (Account 94).

 

When a building or equipment included in this account is sold, the total cost should be credited to this account.  Accumulated depreciation for the building and/or equipment should be charged to Depreciation of Buildings and Improvements (Account 83).  Any gain on the sale should be credited to Additions to Income – Other (Account 805).  Any loss on the sale should be debited to Deductions to Income – Other (Account 855).

 

Note: