Sales of fixed assets

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2011 sir
we are manufacturing of two wheeler Bike accessories, we have sale one machine to any other manufacture & charge CST, my query is that Sale of Machinery will be Count in Sales Accounts or decrease Our Fixed Assets from Balance Sheet.i have done below entry as example

(1) Party A/c Dr 102

Sales A/c Cr 100
CST Cr 2

(2) Sales A/c Dr 100
Machinery A/c Cr 100

kindly suggest.

CA. RICHI SAXENA

CA. RICHI SAXENA (Expert)
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19 December 2011 Your entries are correct but instead of using sales account use income from sale of machinery account because of the reason that if you have to use sales account for the products you sale out regularly and sale of machinery being a irregular transaction must be shown seperately and you will have to charge capital gains tax as well on the transaction as per the income tax act if the machinery has been sold at profit.

CA.Richi Saxena