In this next demonstration, we're going to show you how to dispose off a fixed asset. A fixed asset might be disposed off when it is sold maybe, or maybe you have fully depreciated it and it has no value any longer, and maybe even donated it to somebody. Let's show you how to get that done. We're going to go and get rid of the two pieces of equipment we purchased earlier. One was a mobile shredder truck and the other was a stationary shredder, and leave them four or five years, and we are about to dispose off both of these in two different manners. Just to remind you, on the chart of accounts under fixed assets, we have both of these assets listed. Under shredder equipment, we have the mobile shredder truck, and over the past five years, we had originally purchased it for $751,000. It's about halfway through being depreciated, and the net value which shows up in the parent account here is the $375,750, we are going to sell this asset and guess what, somebody's going to pay the company $400,000 for this. So what we need to do is wipe out the value of this asset because it's being sold and we're actually going to get a profit on that. The second thing we're going to do is the stationary shredder. The stationary shredder has been fully depreciated and it's been donated to a non-profit. It no longer belongs to this company, and we're going to go ahead and wipe this off the books because we don't want it showing up here on the balance sheet any longer, or chart of accounts for that matter. Let's start with somebody buying the mobile shredder truck. Actually, I'm going to copy this value here. That's the value of my asset. So I want to make sure I remember that. I did a Control C there to copy that, and I'm going to go to a journal entry. This first journal entry is representing the sale of the mobile shredder truck. We received a check for $400,000, and deposited that to the checking account. There is my $400,000 going in the bank in sale of mobile shredder truck. Now we need to offset the original entries, which is the remaining value of the asset itself. So I'm going to quickly jump over. I'm going to duplicate this tab because what I want to do is actually look at my values that are on the chart of accounts. If you right-click anywhere in QuickBooks, you can duplicate a tab and open QuickBooks again, which is nice. So what I'm going to do is go to my Chart of Accounts and look at my values for the mobile shredder truck. So that way I don't have to leave my work at the journal entry I'm working on. Back to the chart of accounts. We're looking here, the original purchase of the truck was 751,500. I'm copying that, and I originally had debited for that purchase. So I'm going to credit that to mobile shredder truck original purchase, and that's the value. I'm going to wipe out that initial value, and then I'm going to type in mobile shredder truck again, and the depreciation value needs to be entered here as a debit. Let's go ahead and look at what my depreciation value is. It's right here, and I'm just Control C copying that, going back to my journal entry and pasting it in there. So that's a wiping out the depreciation that's been accumulating over the life of this particular asset. Then finally, there is a profit here, we're selling it for 400,000, but the value on the books is only 375,750. So there's a profit to the company. I've set up another expense account called proceeds from sale of equipment. They basically made a profit of $24,250 on this equipment after all their expenses and using it for years, that's pretty good. So that is how we write that off and get it off the books. If there was a sale, obviously did they had a loss when they sold it? It would be the opposite. It would be loss from sale of equipment, it would be another expense account. But I'm going to hit Save and Close because I want to show you the chart of accounts and see if we've updated our values. It's always good to double-check your work. So everything has zeroed out for the mobile shredder truck. It is not removed the historical activity, it's just zeroed out and now I can make these accounts inactive because this truck no longer belongs to the company. The next one we want to deal with is this stationary shredder. This has been fully depreciated. It was purchased for $35,700, depreciated over the last five years. We need to just get this off the books as well. So let's do another journal entry. Declare that out. Let's go to a journal entry, and this was fully depreciated at January 31st of 2026, and now we're going to do a stationary original purchase. It was a debit originally. Again, back to my chart of accounts 35,700. Copy that, paste it in my credit. Donated stationary shredder. Maybe we donated it to a non-profit or something, and then this would be the accumulated depreciation, stationary depreciation, and it's the offsetting entry. Again, back to the chart of accounts. This was a debit, this was a credit on the original entries, and now I'm just reversing that this is now a credit and this is a debit. Again, saving close, always double-check your work because you can always go back and fix it if you need to. Scrolling down, and now all of these assets should have 0 value, and that's what we want. You don't want to make it count that it is a balance sheet account inactive in QuickBooks Online because if you don't zero this out, QuickBooks Online will for you and it does a journal entry and it offsets still opening balance equity. We don't want to do that. We want to fully remove these assets the way they're supposed to be done and then make them inactive after their zeroed out. That's how to liquidate your assets either by selling those assets or donating them or just retiring them.
