Cash flow statement

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.

Book value of machinery is WDV in this case.

Book value is written down value i.e. value after Depreciation

therefore its original cost=50000+5000=55000

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.

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