CA Parth Verma (NYU Stern Alumni ) (90 Points)
20 June 2011hi frnds....
kindly give me explaination for a/c entry with regards to foloowing case....
we have a asset with a wdv of 20...... we puchase a new asset of 200 and exhange old one and pay only 150....
that means the mkt value of old asset is 50.....
pls give me explaination on above...
thanks in advance:::__)))))
Chiradeep.R.H
(Chirahi & Associates - Consultants)
(240 Points)
Replied 20 June 2011
New Fixed Assets (Cost of New Asset) 200
To Bank A/c( Paid for New Asset) 150
To Profit and loss A/c(Profit on sale of old Fixed asset) 30
To Old Asset A/c (WDV of old asset) 20
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 20 June 2011
yes i agree with chirag if provision for depreciation a/c is not maintained.
if maintaned then following entry should be passed
Asset a/c.............................................Dr 200
To Bank a/c 150
To Asset Disposal a/c 50
Asset Disposal a/c............................Dr ( cost of asset sold )
To Asset a/c
Provision for Depreciation a/c ........Dr (depreciation till date)
To Asset Disposal a/c
WDV= Cost - Depreciation Till date
Asset Disposal a/c ..........................Dr 30
To Profit and Loss A/c 30
CA abhinandan agarwal
(CA CS Bcom(H))
(174 Points)
Replied 20 June 2011
ew Fixed Assets (Cost of New Asset) 200
Bank A/c( Paid for New Asset) 150
Profit and loss A/c 30
Old Asset a/c 20
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 21 June 2011
| Originally posted by : Chiradeep.R.H | ||
 |
New Fixed Assets (Cost of New Asset) 200 To Bank A/c( Paid for New Asset) 150 To Profit and loss A/c(Profit on sale of old Fixed asset) 30 To Old Asset A/c (WDV of old asset) 20 |
 |
abduljawad
(accountant)
(24 Points)
Replied 18 September 2011
hi frnds....
kindly give me explaination
We purchased a new laptop on credit from ‘A’ and sold an old laptop to the same supplier:- Cost of new Laptop : £ 50000 Cost of old laptop : £ 75000 Accumulated Depreciation : £ 45000 Exchange price of old laptop : £ 5000
Write a journal entry. this is the question they ask me in one of interview
Chiradeep.R.H
(Chirahi & Associates - Consultants)
(240 Points)
Replied 18 September 2011
If Buyer is getting Rs.5000 in exchange , the entry will be as follows
New Laptop A/c Dr 50000
New Laptop A/c Dr 50000
To Bank 5000
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 18 September 2011
New Laptop Dr. 50,000
P&L Dr (Loss on exchange of old laptop) 25,000
To PArty 45,000
To Old Laptop (WDV) 30,000
WDV of old laptop (75,000-45,000) = 30,000
Less Exchage Value = 5,000
Loss on Transaction = 25,000
Chiradeep.R.H
(Chirahi & Associates - Consultants)
(240 Points)
Replied 18 September 2011
Mr.Abdul I thought you exchanged old Asset with a new asset.
Please correct me If am wrong.
If it is purchased on credit and old asset sold at Rs.5000, why you mentioned it as exchange price.
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 18 September 2011
Dear Chiradeep,
can you explain how comes there is profit on exchange of old asset? WDV of old asset is 30,000 and selling for Just 5,000, so there must be loss of 25,000 right???
Regards,
Bhaskar
Chiradeep.R.H
(Chirahi & Associates - Consultants)
(240 Points)
Replied 19 September 2011
Query :
"We purchased a new laptop on credit from ‘A’ and sold an old laptop to the same supplier:- Cost of new Laptop : £ 50000 Cost of old laptop : £ 75000 Accumulated Depreciation : £ 45000 Exchange price of old laptop : £ 5000'' Write J.E.
Dear Bhaskar,
Here in the above query the author had mentioned, the exchange price as Rs.5000/-. I understood that the old asset has exchanged for new assetand they are not paying anything for the new asset in exchanging old other than paying Rs.5,000/-.
So My profit Calculation will be
Wdv of old Asset -30000 less exchange price Rs.5000 = Loss is Rs.25000 and New asset Cost is 50000. So profit will be Rs.25000.
Please correct me if am wrong.
Thanks
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 19 September 2011
Dear Charadeep,
As he has mentioned Exchange price as 5,000, it is apparent that he has to pay the remaining amount to the supplier. He has purchased new one and sold the same to the supplier, so he has to pay remaining 45,000 to the supplier, not just exchanged. It is my understanding.
Regards,
Bhaskar
CAclubindia
