Disposal of Fixed Assets : Help

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Can anyone explain disposal of fixed assets, I just cant seem to get my head round it!!

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Disposal of Fixed Assets : Help

    I will tryâ?¦<BR><BR>Imagine you have a car in the books (Dr FA) for £10,000 and you have it for three year (25% s/l depn) â?? you would then have £7,500 (Cr Acc Depn) also on the balance sheet. If you were to sell that car for £3,000 (this would be Dr Profit & Loss on disposal in the P&L account and Cr Bank with the receipt)<BR><BR>What you need to do is to totally clear the car out of the books since it has been sold. You then Dr the acc Depn in the balance sheet (£7.500) and Cr the cost of the car (£10,000) to Cost of car in the balance sheet - the difference should then go to the Profit & Loss account on disposal â?? the one the receipts went to, so that you get an actual (overall) Profit or Loss â?? remember that the depn is ONLY an estimated charge over the UEL (Useful Economic Life) â?? the ideal situation is to get £0 in the profit & loss on disposal, this then shows that the Depn was a correct estimated, but in reality this rarely happens.<BR><BR>Does that make sense or I have I made it sound more complicated?<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Disposal of Fixed Assets : Help

    I'm good at stuff but i just got bored reading that! Sorry...Clumping information like that just looks boring, dont get me wrong it will probably explain it all<BR><BR>Im going to open a help forum at <BR><BR>http://aat.virtualjet.co.uk<BR><BR>if you would like to visit and help you are more than welcome to join-in!<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Disposal of Fixed Assets : Help

    I can't believe how incredibly rude your reply is, Keiron.<BR><BR>Fixed assets can be complicated but if you go through bowlingbazza's reply slowly it answers the query, it's not something you can write in 2 lines where someone will immediately understand!<BR><BR>When there are replies like that, people will not post any help.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Disposal of Fixed Assets : Help

    <BR>Just realised a slight error with my explanation. The receipt would actually be Dr to the bank, and therefore the other entry would be to Cr the P&L on disposal, and not what i originally said.<BR><BR>Hope you find a way understanding it eventually. <BR><BR>Thanks for your kind words Bluewednesday.<BR><BR>Regards all.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Disposal of Fixed Assets : Help

    If your so good at this Keiron that you answer the questions!!<BR><BR>Amanda<BR>

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