disposal

jkc
jkc Registered Posts: 166 ? ? ?
hi Im doing the sim 5D1895 depreciation question, what would go into disposal acc.
why is there an amount for net book value of DR 4536 in the disposal account
written in the journal.


giving up big style.:confused1:

Comments

  • jkc
    jkc Registered Posts: 166 ? ? ?
    Found this old post from visha under search.

    Unfortunately this is the problem will always occur when answers are given to students and is not the answer the way the students were taught. That does not mean that the answer is wrong but the person who wrote the answer is short cutting the answer.

    The way that your tutor has taught you is absolutely correct because you are correctly demonstrating your understanding of the double entry bookkeeping.

    If you debit £12600 in the disposal a/c (from the MV@cost) and Credit £8064 for the accumulated depreciation and then balance off the account – what do you get?

    A debit balance of £4536

    This balance that was posted to the disposal a/c was worked out in the Journal. If you go and examine the answer for disposal journal – the journal says that it will credit £12600 the motor vehicle at cost a/c and then debit £8064 to the MV accumulated depreciation a/c and the debit balance of £ 4536 will be debited to the Disposal account. This is the same answer as if you had carried the instructions in the above paragraph.

    I hope this explanation will make sense but your tutor’s way is correct and if you were to answer your skills test answer like you were taught you will definitely found competent.
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