FRA Dec 2005 Help
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emmag
Registered Posts: 35 Regular contributor ⭐
Section 2 I need help with part (c) the disposal.
The adjustments have been done a little differently.
Original cost £12,000
NBV of part exchanged £6,144
£10,000 was paid from the bank account. The amount was CR to the bank account and DR to the vehicles cost account
Part exchange allowance of £3500
I got:
DR Disposals 12,000
CR Vehicles cost 12,000
DR Vehicles cost 3,500
CR Disposals 3,500
DR Vehicles Acc Dep 5,826
CR Disposals 5856
But what happens to the 10,000?
The answer debited vehicles cost account AND credited vehicles cost account??
I would have DR the vehicles cost account but why is it credited too?
Help?
The adjustments have been done a little differently.
Original cost £12,000
NBV of part exchanged £6,144
£10,000 was paid from the bank account. The amount was CR to the bank account and DR to the vehicles cost account
Part exchange allowance of £3500
I got:
DR Disposals 12,000
CR Vehicles cost 12,000
DR Vehicles cost 3,500
CR Disposals 3,500
DR Vehicles Acc Dep 5,826
CR Disposals 5856
But what happens to the 10,000?
The answer debited vehicles cost account AND credited vehicles cost account??
I would have DR the vehicles cost account but why is it credited too?
Help?
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