treatment of replacement of fixed asset in ledger account

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:29AM in AAT student discussion
my poroblem is i dont understand how to treat replacement of fixed asset in fixed asset account, disposal of fixed asset account, provision for depreciation,p&l

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    treatment of replacement of fixed asset in ledger account

    When you say replacement of fixed asset do you mean part exchanging an old of a new one??? <BR><BR>If so the following journals are what you need.<BR><BR>DR Disposals account x<BR>CR Fixed asset (x) With the original cost of the asset<BR><BR>DR Accumilated depreciation x<BR>CR Disposals account (x) with the total amount of depreciation<BR><BR>DR Fixed Asset x<BR>Cr Cash (x) With the amount paid for the new asset<BR><BR>DR Fixed Asset x<BR>CR Disposals (x) with the part exchange value<BR><BR>This will leave you with <BR><BR>A DR on the Fixed Asset account with the value of the new asset<BR><BR>A balance on the disposals account dr/cr depending if you have made a profit or loss on disposal.<BR><BR>Hope this is what you wanted
  • System
    System Posts: 100,534 🤖 Admin 🤖
    treatment of replacement of fixed asset in ledger account

    If you want some more practice there is three sets of questions on www.accountancystudents.co.uk on this exact subject.<BR><BR>Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    treatment of replacement of fixed asset in ledger account

    can you point me in the direction of the practice questions on www.accountancystudents.com? I can't seem to find them. Thanks!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    treatment of replacement of fixed asset in ledger account

    Just copy and paste this into your browser<BR><BR>http://www.accountancystudents.co.uk/forum/viewtopic.php?t=559<BR><BR>Hope it helps<BR><BR>Annette

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