Level 1

Sell a fixed asset

When you sell a fixed asset how do you book the sales tax?
A machine was purchased in May 2010 for $12,000
Sold in Sep 2013 for $2,500 Plus Tax ($325) Total $2,825
The accum. Amot/Depr.. is: $6,298
The book value is: $5,702
“Clearing” is an Other Current Asset account and to be deposit later into the Bank account.

I made a General Journal Entries for the asset sale as: (Snap from 2010 QB)

Account                                                Debit                      Credit

Clearing:                                               2,500

Machine Cost:                                                                     12,000

Accum Amort./Depr:                              6,298

Proceeds from Sale of Asset:                3,202

So how can I track the Tax that collected from the Sale ($325)? Do I need place that amount of tax within the Clearing amount ($2,825 instead of $2,500)? But still no Tax will be recorded? Thanks

Solved