Become a Certified GST Practitioner with CA Arun Chhajer. Register Now!

FIXED ASSET DELETION ENTRY

Ram (Accountant Trainee) (30 Points)

27 October 2010

Please Help !!!

As on 31.03.2009 In our company we have 8 computers.

On 25.10.2010 we bought 5 computer from a dealer. He had taken 3 old computer from the company and supplied 5 new computers. How to enter this in tally.

How to enter the 3 old computer deletion in tallly that reflects in fixed assets.

Am i clearly express my question?

Sorry for my poor english.

Thanks in advance.

Ramu.

Reply
Follow
Share

6 Replies

Edwin (Article) (41 Points)
Replied 28 October 2010

Show the entry for sale in tally as

Cash/Bank A/c Dr (Agreed Value)

loss on sale A/c Dr

To Fixed Asset A/c

Upgrade to CAclubindia Pro. Subscribe Now!

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 28 October 2010

Hi Ram,

In your case your company has not sold the old comps, hence in my opinion, cash / bank account will not come into the picture. Your company has just replaced the old comps for new ones.

I would suggest following accounting entry (along with one example) :-

Suppose, WDV of old 3 comps is Rs. 7,000/- ; purchase price (gross) of 8 new comps is Rs. 40,000/- ; seller agreed to deduct Rs. 6,000/- from selling price on exchange ; hence, company has paid only Rs. 34,000/- (after deducting Rs. 6,000/-)

Now, the entry would be :-

Computer A/c. ........................ Debit 40,000/-

To Computer A/c. (old) 6,000/-

To Bank Account 34,000/-

Now the balance in Old Comp account will be Rs. 1,000/-. Just write off that amount to P&L A/c.

Entry would be :-

P & L A/c. .............................. Debit 1,000/-

To Computer (old) A/c. 1,000/-

ALL THIS IS WHAT I THINK, OTHER VIEWS ARE WELCOME.

1 Like

Pkala (CA Final (New Course)) (211 Points)
Replied 28 October 2010

Yes, i agreed with Yogesh Shah

Amit Gupta (Loosening Myself) (1508 Points)
Replied 28 October 2010

Originally posted by : Yogesh Shah
	Hi Ram, In your case your company has not sold the old comps, hence in my opinion, cash / bank account will not come into the picture. Your company has just replaced the old comps for new ones. I would suggest following accounting entry (along with one example) :- Suppose, WDV of old 3 comps is Rs. 7,000/- ; purchase price (gross) of 8 new comps is Rs. 40,000/- ; seller agreed to deduct Rs. 6,000/- from selling price on exchange ; hence, company has paid only Rs. 34,000/- (after deducting Rs. 6,000/-) Now, the entry would be :- Computer A/c. ........................ Debit 40,000/- To Computer A/c. (old) 6,000/- To Bank Account 34,000/- Now the balance in Old Comp account will be Rs. 1,000/-. Just write off that amount to P&L A/c. Entry would be :- P & L A/c. .............................. Debit 1,000/- To Computer (old) A/c. 1,000/- ALL THIS IS WHAT I THINK, OTHER VIEWS ARE WELCOME.

Agree!!

shailendra (Accounts Executive ) (128 Points)
Replied 03 November 2010

I agree with Yogesh Shah but there is minor mistake " purchase price (gross) of 8 new comps is Rs. 40,000/- . There should be 5 new comps in place of 8 new comps mentioned.

Upgrade to CAclubindia Pro. Subscribe Now!

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 04 November 2010

HI Shailendra,

In my example, what I have said is - suppose Company has purchased 8 new comps but price of them is proportionately reduced by value of old 3 comps.

Now if you account for only 5 comps then Fixed Asset A/c. will not look proper and true. I have debited Fixed Asset by GROSS value of all new 8 comps. Value of 3 old comps is credited in my example. Ultimate effect is same but IT REFLECTS MORE PROPER & TRUE PICTURE.