Disposals

lmr72

Hi

Please could some one help me. I'm strugling getting to grips with disposals.
Please could some tell me simply the journal for an aquisition & disposal.

:confused1::confused1:

Thanks

lmr

Rachey

lmr72 wrote: »

Hi

Please could some one help me. I'm strugling getting to grips with disposals.
Please could some tell me simply the journal for an aquisition & disposal.

:confused1::confused1:

Thanks

lmr

When you dispose of an asset it's:

CR fixed asset
DR disposals with original cost
DR disposals with accumulated depreciation
DR disposals with sale proceeds

Fill in the blank in the disposal account with the loss or gain.

There is a fantastic e-learning link on the AAT website for Unit 5, it explains disposals along with many many other things.

Good luck! :thumbup1:

crispy

Hello,

To show an easy example:

Asset at Cost of £ 10 with Accum. Depreciation of £ 5 is sold for £ 4. Now without even looking at journals it is easy to see a loss on dispoal of £ 1.

The journals would look like:

1st Remove Asset at Cost
Dr Dispoals £ 10
Cr Asset at Cost £ 10

2nd Remove the Accumulated Depreciation
Dr Accum. Depreciation £ 5
Cr Dispoals £ 5

Last - deal with the proceeds
Dr Bank £ 4
Cr Dispoals £ 4

Draw up the T Account and the disposals should have a brought down balance of £ 1 on Debit side (ie: a loss)

crispy

Opps don't know what happened to my 's' key - hope you understand anyway:001_smile:

lmr72

Thanks for your help.

I will try to get my head around it.