Dear All,
It Is Given In The Cash Flow Question ... A Machinery Having Book Value Of Rs. 50000
(Accumulated Depreciation 5000) Was Sold.
My Question Is What Is Book Value?
Is It Written Down Value Or Cost Of Machinery??
Thanks And Regards.
5 Replies
CA Sai Kumar
(CA)
(93 Points)
Replied 07 October 2011
Book value is the carrying cost of an asset i.e., as at a particular date, it is the value at which the is carried in Balance Sheet.
CA RICHA BADALIA
(CA,CS)
(1682 Points)
Replied 07 October 2011
Book value of machinery is WDV in this case.
Rahul Suneja
(CA-Final, CS-Exec)
(215 Points)
Replied 07 October 2011
Book value is written down value i.e. value after Depreciation
therefore its original cost=50000+5000=55000
Vibhor Pandey
(FINAL)
(106 Points)
Replied 08 October 2011
Dear All,
I Do Agree With You.Book Value Is Written Down Value.I Also
Solved The Question.But Scanners solution Is Different. Here Are
Facts :-
(Rs. 'ooo)
Assets 31.3.05 31.3.06
Fixed Assets 3840 4560
Less : Depreciation 1104 1392
2736 3168
Additional Information
During the year 2005-06 Fixed asstes with a book value of240000(accumulated Depreciation 84000) was sold for 120000. It Has Been Decided To Write Off Fixed AssetsCosting60000 on which Depreciation Amounting 48000 Has Been Provided.
[May-2007 PCC]
Scanner solution :-
Fixed Assets A/c
To Bal b/d 2736000 By Cash 120000
To Purch. 1020000 By Loss
on sale 36000
By Dep 420000
By asset
w/o 12000
By Bal 3168000
3756000 3756000
Depreciation A/c
To Fixed asset 84000 By Bal b/d 1104000
To Fixed Asset By P&l 420000
w/o 48000
To Bal 1392000
1524000 1524000
My Solution :-
Fixed Assets A/c
To Bal b/d 3840 By Bank 120
To Bank 1104 By Loss
On Sale 120
By Dep. 132
By P&l 12
By Bal c/d 4560
4944 4944
Depreciation A/c
To Fixed Assets 132 By Bal 1104
To Bal c/d 1392 ByP &L 420
1524 1524
Please Tell Me Is Scanner Correct?
Thanks And Regards.
Chandan
(PCC)
(27 Points)
Replied 11 October 2011
Dear Vibhor....if u r taking gross values in Fixed Asset Account thn dont dispose off the machinery in the same account.....make a FIXED ASSET DISPOSAL A/C....AND transfer all related entries to that single account and make it correct....coz u have posted single entry to ledger......scanner is correct but the right way is by Machinery disposal account....
Hare Krishna
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