26 September 2009
if WDV OF CAR ON 1.4.2008 IS RS.592500, DURING THE MONTHS NOV.2008, AFTER REPLACEMENT OF FIRST CAR HE PURCHASE A NEW CAR OF RS.640000 (REPLACEMENT VALUE OF FIRST CAR IS 225000 NOT INCLUDED IN RS.640000), THAN WHAT IS THE AMOUNT OF DEPRECIATION FOR THE FINANCIAL YEAR 2008-09 & WHAT WILL BE THE ACCOUNTING TREATMENT
27 September 2009
Assuming the rate of depreciation is 15%, total depreciation for the f.y 2008-09 is Rs. 1,03,125/- as per the following calculation.
WDV -- 5,92,500/- Less: Replacement value -- 2,25,000/- Balance -- 3,67,500/- Depreciation @ 15% -- 55,125/- (A) Value of new car -- 6,40,000/- Depreciation @ 7.5%, being purchased in nov 08 -- 48,000/- (B) Total depreciation A+ B -- 1,03,125/-
27 September 2009
In case of an Individual or small assessees you may credit the Car A/c by Sales Proceeds i.e. Rs 225000/ and Debit Car A/c by the amount of New Car by 640000/. At the year end Debit Depreciation A/c by Rs 103125 by crediting Car A/c
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