Help with VAT on Disposal and Part Exchange
jow774
Registered Posts: 465 Dedicated contributor ๐ฆ
Can someone please give me a helping hand on recording VAT on disposal proceeds. I am fine with record the cost, record the depreciation but recording the proceeds when they include VAT has melted my brain????
Thanks
Thanks
0
Comments
-
Possible credit disposals with the net, credit vat and debit bank with the cash received?0
-
So in the case of a part ex would I just debit the new asset with the gross? You made it sound so simple and now I feel foolish for asking, lol, lol.
Thanks
:thumbup1:0 -
So lets say Old Vehicle cost ยฃ15,000, accum depn is ยฃ7,500. New vehicle cost ยฃ14,500 (inc VAT) and Part Ex value on old vehicle is ยฃ5,000 (inc VAT) assuming VAT is 15%. How do I deal with this in journal form???? Im still stuck on the accounting for the VAT on part exchange proceeds?0
-
Dr Disposals 15,000 cr Disposals 12,500 (7,500 + 5,000)
Dr Vehicle at cost 14,500 (5,000 + 9,500) cr Vehicle at cost 15,000
Dr Accumulated depreciation 7,500
Cr Bank 5,000
What type of company is it? Most companies can't claim the VAT back on vehicles.0 -
You can claim VAT back on commercial vehicles such as vans and lorries.0
-
Well wouldn't you then just take the VAT off the cost and put it to the VAT account?0
-
But that leaves you with a debit entry for the VAT doesnt it? I am soooo confused.0
-
So in theory I would post the invoice for the new vehicle to the purchase ledger, and then raise a kind of sales invoice for the proceeds which would take care of the VAT. Then do the disposal and acquistion as normal on the net value?? Is this correct?0
-
You would debit the net cost to the vehicle account and de the VAT to the VAT account.0
-
Dr Disposals 15,000 cr Disposals 12,500 (7,500 + 5,000)
Dr Vehicle at cost 14,500 (5,000 + 9,500) cr Vehicle at cost 15,000
Dr Accumulated depreciation 7,500
Cr Bank 5,000
What type of company is it? Most companies can't claim the VAT back on vehicles.
i am confuse where did 9500 come from because i put part exchange ยฃ5000+bank14500 in Debit of COst account. is my way wrong?
thanks0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 319 NEW! Qualifications 2022
- 157 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 92 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 274 Tax
- 136 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership