Help please on FRA Dec 05 part 2.1c

mapry

Can someone please explain to me how to work that out as I am totally confused.Disposal accounts are doing my heard ryt now and am panicking...

tallrodney

When dealing with a disposal you need to remember the 3 steps:

1) Debit the disposal account with the original cost of the asset and credit the asset at cost account.

2) Debit the accumulated/provision depreciation with all the depreciation that relates to the asset being disposed off. Credit the disposal account with the accumulated/provision for depreciation.

3) Debit bank with the proceeds off disposal and credit the disposal account with the proceeds.

Once you have done this balance off the disposal account if its a profit its other income in the profit and loss account. If its a loss it picked up as an expense in the profit and loss account

mapry

Ta very much wil wok on this again...:thumbup1: