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    cdoner's Avatar
    cdoner Posts: 4, Reputation: 1
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    #1

    Feb 24, 2008, 03:11 PM
    Disposal of equipment on income statement
    Good Afternoon!

    Can someone please tell me how to record the disposal of equipement on the income statement??

    Thank you

    Chris
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 24, 2008, 11:13 PM
    The income statement would only contain a loss, not the disposal. To "record the disposal," as you are suggesting, means making an entry for it. Those numbers will then tally up with a lot of other numbers to go onto your financial statements.

    You would need to reverse out the equipment account, and its associated accumulated depreciation. If its been fully depreciated (i.e. the accumulated depreciation is the same number as the equipment), then you're done. If there's any differences, that's a Loss on Disposal of Asset. It's like an expense account, so like all expense, it's a debit.

    If that loss exists, that part only shows up on the income statement.
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