Accounting treatment for Fixed Asset Duplication

[amersbiei]

Hi,

How do I treat a duplication in the fixed assets ledger and schedule?

The Duplicated Fixed asset was purchased in Aug 2013 and the asset life period is 2 years, the amount is a small amount and the invoice is still not paid and still in the A/P GL.

I know I can't adjust last year's figures as the Dep. Expense in 2013 was closed to retained earning but I would like to adjust 2014, how should I do that?

Does the following seems right:

1st Entry – remove the depreciation expense in 2014:

Dr. Accum Dep.
Cr. Cost

what would the second entry be:

Dr. A/P
Cr. Fixed Cost

If i did that how I will adjust the Accum?

or

Dr. Accum. Dep
Cr. Fixed Cost?

If I did that how I will close the AP?

Thanks for your help in advance

Amer

 

[kirby]

First get rid of the fixed asset and the AP amount
DR Accts payable
CR Fixed asset cost

Next entry, debit the amount of related accumulated depreciation that is on the books right now. Credit the amount of related depreciation expense that has been recorded so far this year. The difference is the amount of depreciation that was recorded last year. Credit that amount to your "miscellaneous expense" account. Some people credit this to a "misc income" account because it is a credit. It is ugly either way but you have to get rid of it.

And now go back and figure out why the accounting system of internal control failed and allowed this to happen then allowed this to go unnoticed for so long. Then fix both.