Help

System

Hello,

I'm not sure if anyone can help me Ive got my unit 5 Simulation on Wednesday and panicking a bit as I dont realy understand how to do the journal of buying a new van and part exchane of old one!! I get confused as there are so many entries!!! :oops:

Also does anyone have an idea of a possible answer to the below question?

How can the partnership's assets register be improved so as to provide sufficient information for better control of fixed assets??

Any help appreciated

x

System

Re:Help

To do this do it on a step by step approach:

Step one: The new van
Let's say:

Cost: £10,000
VAT (if required): £1,175
Part Ex: £3,000
Balance: £8,875

Journals:

Debit motor vehicle fixed assets: £10,000
Debit input VAT: £1,175
Credit P&L on sale of fixed assets (income statement): £3,000
Credit cash: £8,875

This journal brings in the new van

Step two: The old van

Let's say:
Cost: £8,000
Depreciation todate: £3,000

Credit motor vehicles fixed assets: £8,000
Debit accumulated depreciation: £3,000
Debit P&L sale of fixed assets (income statement): £5,000.

This removes the old van from the books. The dr entry in P&L sale of assets is the balancing figure between cost and accumulated depreciation:

The TB will show a loss on disposal of:

Cost (£8k) less depreciation(£3k) = £5,000 less sales proceeds (part ex value) £3,000 = loss of £2,000.

Hopefully the step by step approach will have helped.

The fixed asset register improvements could be anything from giving assets unique numbers and cross-referencing these to the fixed asset register or improvements to its layout.

Kind regards
Steve

System

Re:Help

Let’s link these together since they cover similar territory;

Sale of an asset; http://forums.aat.org.uk/forums/posts/list/15421.page#87764

Part exchange of an asset; http://forums.aat.org.uk/forums/posts/list/15456.page

Regards,

Robert

System

Re:Help

Thank you very much for your help I will study hard today!!
xx