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LM537
Level 2

Sold Property

I have a question about the General Journal Entry for the sold property. 

I received a Settlement Statement after closing. As I understand General Entry at the end should match the Total Amount of Selling Price, but If I record Accumulated Depreciation the total price increases by that amount on Dr Side and Cr-  Gain increases by the same amount. Is it correct? 

 

2 Comments 2
Rustler
Level 15

Sold Property

Yes it is correct

Depreciation is a cumulative expense taken in past years, it reduces the cost of the asset, thus increasing your net profit

LM537
Level 2

Sold Property

Rustler, 
Thank you for your time and reply. 
we sold the building for about 18M. That is the amount on the settlement. 
after accumulated depreciation added to the entry, the total amount of entry increases to $20,319,298.01. I attached the entry , that I am working on. 
It's not clear to me if the total amount should match to the amount of settlement.  Thank you 

Cash1152  14,751,730.32 
Building 1514        750,000.00
Building Maintenance1516     7,574,991.88
Accumulated Depreciation - Building 1519         61,898.58 
Accumulated Depreciation - Building Maintenance1516    2,057,399.43 
Deposit In Escrow2006    2,750,000.00 
Title Charges Expense        128,200.00 
Commisions7450       570,000.00 
Certificate7705                69.68 
Realised Gain 4000   11,994,306.13
    
Total   20,319,298.01  20,319,298.01

 

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