My company sold some office furniture to an employee. The furniture was purchased at $2000.00. I know that the furniture has depreciated by $1700.00 and sold the employee at $300.00. How would I prepare a JE in our books to reflect this transaction?

DEBIT Bank Account 300
CREDIT Furniture Account 2,000
DEBIT Provision for Depr on Furniture 1,700

Being sold some office furniture to an employee.

Quote:

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Originally Posted by ROLCAM

DEBIT Bank Account 300
CREDIT Furniture Account 2,000
DEBIT Provision for Depr on Furniture 1,700

Being sold some office furniture to an employee.

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I apologize but I made a mistake in my typing, the employee purchased the furniture for 500.00 (not 300) and if the furniture was entered into our books when purchased for 2000.00 DR the office furniture expense account, I do understand offsetting that account with a CR. Let me try this again.

We sold furniture to employee for 500.00 cash, the furniture initially cost 2000.00 but at time of sale, the furniture was only worth 300.00 (that is cost less accumulated depreciation).

If I do the following, it does not balance:

Cash Acct DR 500.00
Furniture Exp CR 2000.00
Depreciation DR 1700.00

NO PROBLEM! We need another line.:-

Cash Acct DR 500.00
Furniture Exp CR 2000.00
Depreciation DR 1700.00
Profit on Sale of Asset CR 200.00

The last line completes your entry.

Quote:

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Originally Posted by ROLCAM

NO PROBLEM !! We need another line.:-

Cash Acct DR 500.00
Furniture Exp CR 2000.00
Depreciation DR 1700.00
Profit on Sale of Asset CR 200.00

The last line completes your entry.

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Thank you so much for your help in understanding the JE process. May I ask you one more question please. I have posted another question but no one ever answered it. Here it is.

I have been asked to enter a JE to record the company's sales, cash receipts, deposits and increase the cash on hand. These are the figures the accountants gave me:

Cash Receipts:
Sales (Cash & Credit) $8431.00
Sales Taxes $ 675.00
Collections on AR $750.00
Less Credit Sales ($3678.00)
Deposits to Operating ($5928.00)

The beginning balance of the cash account was $500.00
The ending balance is $750.00 which means that the cash account has only increased by $250.00.

I guess I don't understand what or how I am suppose to hit in the JE except for the cash account but what am I to offset?

I have answered you already!

This is the Journal Entry you require:-

DEBIT CREDIT

DEBIT CASH ACCOUNT 250.00
CREDIT SALES ACCOUNT 8,431.00
CREDIT SALES TAXES ACCOUNT 675.00
CREDIT ACCOUNTS RECEIVABLE A/C 750.00
DEBIT SALES ACCOUNT 3,678.00
DEBIT OPERATING ACCOUNT 5,928.00

9,856.00 9,856.00