Help needed FRA clearing suspense acc
Loops1980
Registered Posts: 8 New contributor 🐸
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
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
0
Comments
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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.0 -
Thats brilliant thankyou, I just get so cinfused sometimes!!
Thanks0 -
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