Definition of a Fully Depreciated Car
A fully depreciated car is one where the car's historical cost has already been allocated to expense (except for the estimated salvage value , if any).
Accounting Entries for a Fully Depreciated Car
If the fully depreciated car continues to be used , there will be no further depreciation . The company cannot depreciate more than the car's cost.
If the fully depreciated car is sold or scrapped , the following accounting entry is needed:
- Debit to Cash for the amount received
- Debit Accumulated Depreciation for the car's accumulated depreciation
- Credit the asset account containing the car's cost
- Credit the account Gain on Sale of Vehicles for the amount necessary to have the total of the debit amounts equal to the total of the credit amounts