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If i purchase a motor car on 1 April 2009 for 100000 /- and sell it after 6 months and 1 days for same rate then what will be the entry for this

and what about depriciation for the same as well as entry

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6 Replies

Vidya (Student) (789 Points)
Replied 13 September 2009

Depreciation needs to be charged in the year of sale proportionately. So the depreciation amount will equal profit on sale of asset. Let me know if you need further clarification

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satendra (Sr. Accounts Manager) (40 Points)
Replied 16 September 2009

first u can make the entry of profit on car sale n then u can avail the depreciation on this. m i right?

CA Hemant Kumar (CA, LLB (p), B.Com) (204 Points)
Replied 18 September 2009

you should do the following entry

depretiation a/c Dr. let's say 10000

to asset a/c 10000

so ur asset value will becum 90000 Rs.

then at the time of sale you have to pass entry as

Cash/bank Dr. 100000

to Asset a/c 90000

to profit an sale of asset a/c 10000

NOTE: pass the depretiation entry proportionately...............with respect to time

CA. SUDHARSAN K G (Chartered Accountant) (472 Points)
Replied 19 September 2009

a) Book the entry for Depreciation for a period of Six Months:

Depreciation A/c Dr.

To Car A/c

b) Entry for sale of the Car:

Bank A/c Dr.

Loss on Sale of Car (If Sale is made on Loss) Dr.

To Car A/c ( Net Value)

To Profit on Sale of Car (If Sale is made on Profit)

Ajay (executive ) (23 Points)
Replied 22 September 2009

because using of car for six month is should be deprecitaed by six month and if you sold it at the same price on which you purchased it then its your profit you can entered it first .1.

1. depreciation A/c Dr.

Assets (car) A/c Cr.

after this your book value of assets will reduce and you are saling at higher then book value so its profit .

2. Bank A/c Dr.

Assets (car) A/c Cr.

profit on sale A/c Cr.