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
