Help!! TP&L and Balance Sheet Advice

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
I have some homework and need some help to get back into the swing of things!!<BR><BR>I have an adjustment on a profit and loss acount which is:<BR><BR>Some fixtures and fittings which had cost £2100 with an NBV of £840 had been sold for £1000 on credit terms to a dealer, but no entries had been made in the books.<BR><BR>?? I have totally forgotton how to treat this. I am pretty sure it affects the Depreciation for the Fixtures and fittings but I don't know how and am not sure what else it effects!<BR><BR>Help would very much be appreciated!<BR><BR>DeDe<BR>x

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help!! TP&L and Balance Sheet Advice

    Hi Dede,<BR><BR>We are dealing with disposals of fixed assets.<BR>The first thing to do is to establish how you can "remove" the asset from your fixed asset list. The second thing is to record the actual payment.<BR>Currently your fixed assets are affecting the fixtures and fittings account and the accumulated depreciation for fixtures and fittings account. The fixtures and fittings account includes the asset value at cost, in this case £1200, the accumulated depreciation account includes a figure of £360 (£1200-£840) in respect of this item. To remove them the following journal entry is made<BR><BR>Dr Disposals £1200<BR>Cr Fixtures and fittings £1200<BR><BR>Dr Accumulated Depreciation £360<BR>Cr Disposals £360<BR><BR>Once you have done this, you would record the sales. The "profit" you make is the difference between NBV and the amount the item is sold for.<BR><BR>Good luck<BR><BR>Ditti

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