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To account for this on the balance sheet, you would debit accumulated depreciation to zero it out, then credit the fixed asset accounts to zero them out. The net amount (which is the book value of your assets) should be debited to dividends, which is an equity account
This will zero out everything. Then, when you close the month, the dividends account will be closed to retained earnings
You may have negative retained earnings since the book value of the assets exceeded your existing retained earnings balance
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I will add that you will also credit 'gain on disposal of equipment' for the amount by which the fair market value exceeds the book value of the assets. This added to the book value will be your debit to dividends
I've done all of this. What would their dividend be? Here's the whole picture:
Their dividend is the fair market value of the property
Assets: Cash 3387, fixed assets 195,289, acc depr 155,506, capital stock 20,000, paid in capital 20,760, retained earning 34650 after "sale of assets" on tax return. Is there a gain or loss on the business at termination?
I'm not sure. You would have to calculate all that. All I can give you is general information.
Thanks for your he;[
help. Must be Monday.
I couldn't calculate your gain or loss on this, without reviewing the entire client file
I can tell you which entries to make to clear out the assets, which was the subject of your original question
The ratings won't let me rate your answer. Says your expert hasn't finished answering.
Sorry about that - if you would, please try again. I had a feature disabled
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It's still saying you haven't finished answering. You answered my answer in a timely fashion and I was able to complete the task so I would say yes it was excellent service.