Help needed FRA clearing suspense acc

Loops1980

Hi, I am due to sit FRA this December and I am completely stuck on a journal question to clear a disposal, I would be so grateful if anyone could help me please??!!!

A) Some fittings were acquired during the year for £1200. The correcrt entry was made to the bank but no other entries were made. Ignore VAT

Some fixtures & fittings were sold during the year for £1000

i) This was correctly entered into the bank ac but o other entries were made
ii) The fittings had originall cost £4000 and the NBV at time of disposal was £2168 ignore VAT

What journal entries would be required for this as I am completely stuck?

Thanks in advance
Lyndsey

OlympicRudi

For A)

Dr Fictures & Fittings £1200
Cr Suspense £1200


For

First you have to make put the £4000 original cost into the disposals account.

Dr Fixtures & Fittings Disposal Account £4000
Cr Fixtures & Fittings £4000

Next you need to put the accumualted Depreciation into the disposals Account. Acc Dep = 4000(Cost)-2168(NBV) = £1832

Dr Fixtures & Fittings Provision for Depreciation £1832
Cr Fixtures & Fittings Disposal Account £1832

Next you have to do the entry for the money received for the goods. However remember part i) did the bank half, so this will involve the suspense.

Dr Suspense £1000
Cr Fixtures & Fittings Disposal Account £1000

Finally you need to do the journal entry for profit/loss on disposal. In this case the loss is 2168(NBV)-1000(Money Received) = £1168. Therefore,

Dr Loss on disposal £1168
Cr Fixtures & Fittings Disposal Account £1168


Hope this helps

PS. You may find slight variations on account names, however the structure will be the same.

Loops1980

Thats brilliant thankyou, I just get so cinfused sometimes!!
Thanks

OlympicRudi

Loops1980 wrote: »

Thats brilliant thankyou, I just get so cinfused sometimes!!
Thanks

Easy to do. Just take it step by step and you'll be fine