Help!! Disposals and accumulated Dep'n

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi Everyone,<BR><BR>Im getting myself in a real panic with working out the accumulated dep'n once a asset has been disposed. Has anyone got any easy ways to remember how to do it?? <BR><BR>This was in the past paper for Dec 03 and I got it completley wrong!!<BR><BR>Thanks and Good luck everyone!

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help!! Disposals and accumulated Dep'n

    This may seem a really simple way - or stupid, but the way i remember is<BR><BR>Think how you would clear an account at the year end....as all you are doing is taking the asset out of the account <BR><BR>Take out the fixed asset your selling and put it in Disposals<BR><BR>Credit - Fixed Assett with amount <BR>Debit - Disposals<BR><BR>Now take out the Depreciation from the Accum. Depreciation account<BR><BR>Debit - Accum Depreciation account<BR>Credit - Disposals<BR><BR>Then you do the bank entry<BR><BR>Debit - Bank<BR>Credit - Disposals <BR><BR>Then just balance the disposal account of to sure the profit or loss made.<BR><BR>Amanda
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Help!! Disposals and accumulated Dep'n

    I am in the same situation as you i look at it like this (and i hope i am right).<BR>If you are asked to work out accumlated depreciation once an asset has been dispossed. Always deduct the sale proceeds from the cost price and the depreciation on that asset from the depreciation to date. the answer you get will give you the remaining depreciation on the remaining assets.<BR><BR>The accumlated depreciation is easy if it is SL then you will know that it hasen't changed but if it is RB the just work it out on the figue you got when you deduceted the depreciation on the cost price of the fixed asset. Then using the percentage they gave you you multiply that and you get the accul=mlated depreciation for that year. (dont get confused with the total depreciation and accumlated depreciation for the year, they are different!) <BR><BR>Now i hope i explained that right. I proberly didn't as my english isnt the greatest but let me know otherwise and i will try and put it in the best of terms.<BR><BR>Good luck! I'm gonna need it

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