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
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
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