S ELAVARASI (ACCOUNTANT) (2975 Points)
11 July 2018Dear Sir / Madam.,
A Car's opening balance on 01/04/17 Rs. 227,024. The Car sold on 12/02/2018 Rs. 210,000. (Exchange and Purchase New Car).
My Questions :
1. How to provide Depreciation for the Old Car and New Car?
2. How to account this Sale of Old Car?
Nitin Mahale
(CA Student)
(88 Points)
Replied 12 July 2018
Anjali P Nair
(ACA,ACMA)
(582 Points)
Replied 12 July 2018
Depreciation shall be chargeable on value of block of asset.
Amount on which depreciation to be charged is (opening+purchase-sale) value.
Loss/profit on sale shall be accounted as (sale value-WDV of car as on 12/02/2018)
profit on sale = Rs.17,030 (210000- 192970)(227024 - 227024*15/100)
Journal entry is
Cash/Bank Dr 210000
Accumulated depreciation Dr 34054
To Motor car 227024
To Profit on sale 17030
(Being profit on sale of car accounted)
CAclubindia
