A car having WDV of Rs. 28 lac on 31.03.2016 was sold at Rs. 23 lacs on 31.12.2016......Please guide me the treatment of this transaction in Profit and Loss Account and Balancesheet.
30 January 2017
Charge the additional depreciation for 9 months by the following entry, Dr. Depreciation expense Cr. Accumulated depreciation. If sold at a profit, After charging the depreciation if sales proceeds is greater than the wdv of the asset then its sold at a profit. Pass the following entry Dr. Accumulated depreciation Dr. Cash/Bank Cr. Profit on sale of non current asset Cr. Asset (car). If sold at a loss, After charging depreciation if wdv of asset is greater than the sales proceeds then its sold at a loss. Pass following entry Dr. Accumulated depreciation Dr. Cash/Bank Dr. Loss on sale of non current asset Cr. Asset (Car)
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