Help needed FRA clearing suspense acc

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

B) 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

Comments

  • OlympicRudiOlympicRudi Feels At Home Posts: 55Registered
    For A)

    Dr Fictures & Fittings £1200
    Cr Suspense £1200


    For B)

    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.
  • Loops1980Loops1980 New Member Posts: 8Registered
    Thats brilliant thankyou, I just get so cinfused sometimes!!
    Thanks
  • OlympicRudiOlympicRudi Feels At Home Posts: 55Registered
    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 :)
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