Will it associate withe computer in assets or not?
If a computer is shown in Assets that means it is an Asset of the Entity (just like Cash in a Bank Account) and will most probably be under a heading in the Balance Sheet named Plant and Equipment (or some similar title name)
As an Asset it will be subject to Depreciation on an Annual Basis - and upon being sold it will have a Realized Value - the difference between the Depreciated Value and the Realized Value (if destroyed the Realized Value will be NIL) is either a Profit (or LOSS) upon DISPOSAL and this value is shown as such on your Depreciation Schedule.
Now in this ABOVE QUESTION - the computer is being placed into INVENTORY - so determine a fair and reasonable Selling Price (less say a 15% margin to cover advertising and associated selling costs and Profit upon sale) - this amount is a fair REALIZED VALUE.
1. Calculate the Profit or Loss based on this Realized Value for the DEPRECIATION SCHEDULE and the Disposal of the Asset - the computer will not now be regarded as an Asset any more.
2. The Realized Value now becomes the Cost of the item as a Stock Inventory item that is being sold - and when SOLD has either a Profit (or Loss) upon SALE and shown in your Trading Statement (and incorporated with other amounts into your GROSS PROFIT (or Loss). - The item is no longer anything to do with Assets as it is an INVENTORY STOCK item.
3. You can easily do a Journal Entry to handle this transfer from Assets to Inventory, however, based on the way the question is asked I assume you have very little accounting knowledge (and so this is no problem) just consider the transfer in the manner in which I have outlined and imagine if you were to draw a cheque to purchase an item of stock/inventory (for the Realized Value) ie DEBIT STOCK and pay that cheque into the Bank Account as if it was paying the Entity for the purchase of the Assets (at the Realized Value) so CREDIT PLANT AND EQUIPMENT (or whatever that Asset Group is named)
Hope that explanation is helpful to you
Yes, the two should become associated depending on what you have configured to match assets and inventory. In our K1000 we match serial number between the two and our team that does receiving uploads all received computers when the arrive. Once the machines are imaged and appear in KACE inventory the records get matched.
Sign up today to participate,
stay informed, earn points and establish a reputation for yourself!