top button
Flag Notify
    Connect to us
      Facebook Login
      Site Registration Why to Join

Facebook Login
Site Registration

Where does the purchase of equipment show up on a profit and loss statement?

+1 vote
10 views
Where does the purchase of equipment show up on a profit and loss statement?
posted Jun 22, 2017 by Anushka

Share this question
Facebook Share Button Twitter Share Button Google+ Share Button LinkedIn Share Button Multiple Social Share Button

1 Answer

0 votes

The purchase of equipment that will be used in a business is not reported on the profit and loss statement. However, the depreciation of the equipment will be reported as depreciation expense on the profit and loss statements during the years that the equipment is used.

For example, if a company buys equipment for $100,000 and it is expected to be used for 10 years, the company's profit and loss statements will report depreciation expense of $10,000 in each of the 10 years (assuming the straight-line method of depreciation is used).

The purchase of equipment is shown on the statement of cash flows for the period in which the purchase took place. The equipment will also be reported on the company's balance sheets at its cost minus its accumulated depreciation.

The profit and loss statements are also known as income statements, statements of operations, and statements of earnings.

answer Jun 23, 2017 by Shantanu Arora
Contact Us
+91 9880187415
sales@queryhome.net
support@queryhome.net
#280, 3rd floor, 5th Main
6th Sector, HSR Layout
Bangalore-560102
Karnataka INDIA.
QUERY HOME
...