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disposal unit 5

meibakermeibaker Trusted RegularRegistered Posts: 481
what's the journal entry for this?
original cost 2000
NBV at the time of disposal 1024
proceeds nil
not sure how to treated the proceeds as nil, is this means the item been scrapped for nothing?

Comments

  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    Take it step by step.

    First - remove asset from the asset account so that will be
    Dr Disposals 2000
    Cr Asset account 2000

    Then remove the depreciation
    Dr Accumulated depreciation (2000-1024) 976
    Cr Disposals 976

    So the disposals account has got a debit balance of 1024 in it. To clear this:
    Dr loss on disposals of tangible fixed asset 1024
    Cr Disposals 1024

    You are right in saying that the asset was scrapped or given away - there were no proceeds on disposal.
  • meibakermeibaker Trusted Regular Registered Posts: 481
    thanks for that.
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