Fixed Asset Aquisition & Disposal of Part Ex - Give us a Clue!

Mendy
Mendy Registered Posts: 15 Dedicated contributor ? ? ?
Hi, can anyone help please? I can't get my head around the journal side of aquisition of a new fixed asset & disposal of the part ex. I've looked through my books, notes and passed papers but can't find a solution!

New van cost: £17600
Vat: £3080
RFL: £190
Part ex: £3500
Sundry Creditor: £17370

I'd put in my journal the van cost £17600 but was told this was incorrect because it was £14100. I've been stressing out over it ever since!

Thank you for any help!

Comments

  • tallrodney
    tallrodney Registered Posts: 24 Dedicated contributor ? ? ?
    DR Van 17,370
    DR Vat 3,080
    DR Motor vehicle expenses 190
    CR Sundry creditors 17,370
    CR Disposals 3,500
  • CJC
    CJC Registered Posts: 1,657
    Whoever told you to put 14100 in you journal was wrong. The cost of the van is 17600 and that's what should go in the accounts. What you get from the part exchange is irrelevant to the valuation of the asset.

    I think tallrodney made an error and it should be dr Van 17600 but the rest is right.
  • Mendy
    Mendy Registered Posts: 15 Dedicated contributor ? ? ?
    Hi, this was on our devolved and was my only error. I did it exactly as you have both said but the £17600 was marked as incorrect and I have to redo another question in the same format to prove that I'm competent!:confused1:
  • rachy1975
    rachy1975 Registered Posts: 366
    Mendy wrote: »
    Hi, this was on our devolved and was my only error. I did it exactly as you have both said but the £17600 was marked as incorrect and I have to redo another question in the same format to prove that I'm competent!:confused1:

    would you not just owe the sundry creditors 14100 as they have taken a vehicle worth 3500 as part exchange??
  • Mendy
    Mendy Registered Posts: 15 Dedicated contributor ? ? ?
    No, you wouldn't owe the sundry creditor £14100 as there's vat & road tax on the invoice too, the total due to them is £17370. But thanks anyway!
  • CJC
    CJC Registered Posts: 1,657
    Mendy wrote: »
    Hi, this was on our devolved and was my only error. I did it exactly as you have both said but the £17600 was marked as incorrect and I have to redo another question in the same format to prove that I'm competent!:confused1:
    Now I'm confused too - I can't see anyway how it's right to enter the new van in the books valued at 14100.
  • rachy1975
    rachy1975 Registered Posts: 366
    if your disposing of a vehicle dont you have to credit the vehicle cost account that amount too?? and all the acc depn??
  • CJC
    CJC Registered Posts: 1,657
    Yes, but the question doesn't ask you to do that or give you the information needed, all it tells you is the amount you get in part exchange. You would in this case assume that the entries for the disposal have already been done
  • Rachey
    Rachey Registered Posts: 589
    I would be tempted to make 2 separate entries to the vehicle cost account

    DR Vehicle Cost £14100
    DR Vehicle Cost (p/x allowance) £3500

    I'm doing FRA at the moment and we always make 2 entries if there is a p/x allowance.
    But by the looks of this question so far, i'm aware this may not be correct....!!
  • rachy1975
    rachy1975 Registered Posts: 366
    CJC wrote: »
    Yes, but the question doesn't ask you to do that or give you the information needed, all it tells you is the amount you get in part exchange. You would in this case assume that the entries for the disposal have already been done

    aah ok...im not very good on these so i always draw my t accounts...i managed to pass it in my skills test by doin it that way :001_smile:
  • Rachey
    Rachey Registered Posts: 589
    rachy1975 wrote: »
    aah ok...im not very good on these so i always draw my t accounts...i managed to pass it in my skills test by doin it that way :001_smile:

    Haha im the same with T accounts! I draw that many now that i completely give up using a ruler... :001_rolleyes:
  • Mendy
    Mendy Registered Posts: 15 Dedicated contributor ? ? ?
    I think I may have sussed it out! Sorry, but you are given the cost of the disposal and its accumulated depreciation! The cost was £14000 & AD £10976.I think it should be:

    DR motor vehicle cost £14100.00
    DR Vat £3080.00
    DR Selling Expenses £190.00
    CR Sundry Creditors (£17370.00)
    DR Motor vehicle cost £3500.00
    CR Disposal (£3500.00)
    DR Accum Depc'n £10976.00
    DR Disposals £3024.00
    CR Motor Vehicle Cost (£14000.00)

    Phew, hope that's now right!
  • rachy1975
    rachy1975 Registered Posts: 366
    Mendy wrote: »
    I think I may have sussed it out! Sorry, but you are given the cost of the disposal and its accumulated depreciation! The cost was £14000 & AD £10976.I think it should be:

    DR motor vehicle cost £14100.00
    DR Vat £3080.00
    DR Selling Expenses £190.00
    CR Sundry Creditors (£17370.00)
    DR Motor vehicle cost £3500.00
    CR Disposal (£3500.00)
    DR Accum Depc'n £10976.00
    DR Disposals £3024.00
    CR Motor Vehicle Cost (£14000.00)

    Phew, hope that's now right!

    haha thats makes more sense now....thought there would be some acc depn in there somewhere as it is a part exchange

    :001_tongue:
  • any2002uk
    any2002uk Registered Posts: 88 ? ? ?
    sorry i don;t understand it. i am doing what you did but focus on cost and disposal
    . i don;t know why AAT will n ot provide us T accounts very visual rather than text.

    cost
    bal £14100./
    P.E £3500/14000

    bal now 576?

    disposal
    3024? ........./P.E 3500
    where from?../
    14000..........

    is that what you mean in text above?
  • Rachey
    Rachey Registered Posts: 589
    Mendy wrote: »
    I think I may have sussed it out! Sorry, but you are given the cost of the disposal and its accumulated depreciation! The cost was £14000 & AD £10976.I think it should be:

    DR motor vehicle cost £14100.00
    DR Vat £3080.00
    DR Selling Expenses £190.00
    CR Sundry Creditors (£17370.00)
    DR Motor vehicle cost £3500.00
    CR Disposal (£3500.00)
    DR Accum Depc'n £10976.00
    DR Disposals £3024.00
    CR Motor Vehicle Cost (£14000.00)

    Phew, hope that's now right!

    Yeh i thought there would be 2 debit entries in the vehicle cost account. I really hate p/x's!!
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