help!!!
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i am taking the unit 5 skills test on monday and my mind has gone blank with double entry for buying new delivery vehicle and part ex old1. need2 do journal4disposals and i cant do it!
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help!!!
ok lets see if I remember this - its easier to explain by drawing T accounts but I hope this helps anyway :-)<BR><BR>First step is to open up a disposals account and deal with the sale of the old asset first, open up a disposals account and credit it with the amount of the part exchange and then debit the fixed asset account with the same amount<BR><BR>then debit the provision for depreciation account for the amount of depreciation accumulated so far for the asset being sold and credit the disposals account with the same account<BR><BR>the asset being sold also needs to be taken out of the fixed asset account, so credit the fixed asset account with the cost of the asset and debit the disposal account with the cost of the asset<BR><BR>add up both sides of the disposal account and the difference between the two shows whether there is a profit or loss on the part exchange on the fixed asset - if the debit side is higher then a loss has been made, if the credit side is higher then a profit has been made<BR><BR>this profit or loss is then charged to the profit and loss account as an expense<BR><BR>then to deal with the purchase of the new asset, debit the cost less the part exchange allowance to the fixed asset account as well and the credit would be to the bank (unless it is being paid for in installments!)<BR><BR>the two debits on the fixed asset account should equal the cost of the new asset<BR><BR>I hope this helps and I haven't confused you further,<BR><BR>:-)<BR>0 -
help!!!
thank you. this really helped0