partnership accounts andDisposal of fixed Assets

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Please a want afull explaination ofthe Disposal of Fixed asset and the Partnership Account all with examples

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    partnership accounts andDisposal of fixed Assets

    Disposal Account<BR><BR>Work out the disposal as a t account<BR><BR>1 credit the fixed asset with the total cost of the disposal<BR><BR>2 debit the disposal account with the total cost<BR><BR>3 work out what the accumulated depreciation for this disposal should be at the time of sale make sure you read questions carefully some mention not to depreciate the asset on the year of disposal debit the accumulated depreciation and credit the disposal account<BR><BR>If the asset is sold credit the disposal with the amount sold if part exchanged with a new asset put it as part exchange as description and amount if the balancing figure is on the credit side it is a loss if the balancing side a debit it is profit<BR><BR>When you prepare the final trial balance make sure you only take the loss or the profit figure and ignore all the rest.<BR><BR>Your trial balance will have now adjusted cost figure adjusted accumulated depreciation and the loss or profit on the sale of disposal <BR><BR>Hope this helps<BR><BR>Now the cost of your fixed assets will reduce because of the disposal <BR>and your accumulated depreciate will change it is a credit you will debit this account
  • System
    System Posts: 100,534 🤖 Admin 🤖
    partnership accounts andDisposal of fixed Assets

    Partnership accounts you have current account and capital account<BR><BR>capital account will have capital introduced or withdrawn by each partners this account remains untouched except if a partners joins or retires this is fixed<BR><BR>Than there would be an amount of goodwill <BR><BR>Debit good will account credit the capital account the old partners will share the goodwill as per their ratio. Most of the time the good will is written off you credit good will account and debit the capital account and the new partners will now share this amount at the new profit share ratio excluding the old<BR><BR>The current account will have the opening balances of each partners any interest on capital salaries agreed and share of profit from the appropriation account on credit side and drawing on debit side if it is loss than the loss will be share on this side <BR>The current fluctuates <BR><BR>Hope this is a good explanation and not confused you

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