Disposal

solly
solly Registered Posts: 10 Regular contributor ⭐ ? ⭐
hiya everyone

really need help on disposal. can someone tell me the accounting treatment for selling a fixed asset and also part exchanging a fixed asset. with that could someone which tell me figure such as the original cost, part exchange allowance etc.

thanks

Comments

  • visha
    visha Registered Posts: 218 ? ? ?
    There are only 3 entries to be made in a disposal a/c.

    1 - transfer the debit balance from Fixed Assets at cost a/c to Disposal a/c

    2 - transfer the credit balance from Accumulated Depreciation a/c to Disposal a/c

    3- Credit Disposal a/c with Sale proceeds and Debit it either in

    .................................................. ..........................................a) Bank if cash received
    .................................................. ..........................................b) Fixed Asset a/c if payment for part exchange
    .................................................. ..........................................c) Sundry creditor if payment against outstanding invoice.

    The journals you need to do is what I have mention above!

    1) Debit DISPOSAL a/c with cost say...........£10,000
    ...Credit Motor Vechicle a/c at cost..............................£10,000

    2) Debit MV Accumulated dep a/c say...........£ 6,500
    ...Credit DISPOSAL a/c...............................................£6 ,500

    3) Debit MV @ Cost with Part X value say £2,500.............................IF balance of new car Debited to MV at Cost a/c
    Credit DISPOSAL with.............................................. £2,500

    OR

    ) Debit Sundry Creditors with Part X value say £2,500.............................IF Full value new car Debited to MV at Cost a/c
    Credit DISPOSAL with.............................................. £2,500
  • confoosed
    confoosed Registered Posts: 38 ? ? ?
    Visha.... you're amazing, you just know EVERYTHING. Thanks for all your help to people on this forum
  • solly
    solly Registered Posts: 10 Regular contributor ⭐ ? ⭐
    thanks
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