282 – Service Equipment

Fixed Assets

 

Synopsis

Account 282

Debits

Credits

  1. The cost of machinery/permanent tools and equipment acquired or built (not a permanent part of the building) for use in the shop.

  2. The cost of special tools with a value exceeding an agreed limit, i.e., $500.  Anything below this amount should not be capitalized and charged to the appropriate expense account.

  1. The cost of machinery tools and equipment in the account that is sold or otherwise removed.

 

 

Remarks:

Machinery, tools, equipment, for the Service or Body Shop Departments, whether purchased new or used, should be charged to this account and depreciated over their useful life.

 

This account balance represents the net purchase price, freight, and installation costs of all machinery, permanent tools, and equipment purchased or built (including lease-purchase arrangements).

 

Parts and Accessories Department equipment should not be charged to this account.

 

Small tools of an expendable nature should be charged directly to expense.

 

Repairs to items in this account should be charged directly to expense as they occur.

 

All service equipment acquired should be listed in detail on a fixed asset inventory and depreciation record.  The accumulated total in the cost column should agree with the balance in this account each month-end.  A separate fixed asset record maintained for mechanical and body shop equipment will afford better internal control and distribution of costs.

 

When an item included in this account is sold, the total cost should be credited to this account, and the reciprocal accumulated depreciation account relieved.  Any gain on the sale should be credited to Additions to Income – Other (Account 805).  Any loss on the sale should be debited to Deduction to Income – Other (Account 855).

 

Note: