Upgrade and Save: Get 10% OFF on CAclubindia Pro Subscription! Use Code: SAVE10 Subscribe Now!

Help me first than anybody else

CA Priya (CS Final) (1049 Points)

10 June 2010

Hey buddies need yr help once again as usual......... Kindly send me the accounting entries to be passed in case of Purchase of an asset on exchange of Old asset which has some descent WDV value.......... Kindly be clear in yr entries....... Thanks a looooooooot in advance yer........... Cheeeeeeers......................

Reply
Follow
Share

7 Replies

(Guest)

first pass the entry of disposing of the old assets

CashA/c Dr

To AssetA/c

than pass the entry of purchasing of an new asset

AssetA/c Dr

To CashA/c

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

If old asset is taken over at book value( i.e wdv)

Asset account (new asset) dr

to cash/bank/party

to Asset account (old asset)

if not then you have to book profit or loss also.

hope its clear...............

Kalpesh Chauhan, (Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com)) (8311 Points)
Replied 10 June 2010

1.Asset (New) A/c Dr.

To Asset (old)

To Profit & Loss A/c (If residual value of asset given up is less than asset acquired i.e Profit)

2. Asset (new) A/c Dr

Profit & loss A/c(IF residual value of asset given up is more than asset acquired i.e Loss)

To Asset (old) A/c.

SRIDHAR MARYALA (student) (63 Points)
Replied 10 June 2010

EXAMPLE: (1) New asset value Rs.1000

WDV of old asset Rs.600

Assume Agreed value of old asset for exchange purpose Rs.450

New asset a/c Dr 1000 (value of new asset)

Profit &loss a/c Dr 150 (loss on disposal of old asset)

To old asset a/c 600 (disposal of old asset)

To cash a/c 550 (balance amount settled in cash )

EXAMPLE: (2) New asset value Rs.1000

WDV of old asset Rs.600

Assume Agreed value of old asset for exchange purpose Rs.750

New asset a/c Dr 1000

To old asset a/c 600

To cash a/c 250

To profit & loss a/c 150

1 Like

ANANDA D (Article Assistant) (61 Points)
Replied 11 June 2010

On purchase of new asset in exchange with old asset the following entries required to be passed in books based on consequences explained there in

Cases	Cost of New Asset	WDV of Old Asset	Exchange valve of Old Asset	Entry
1	Rs.10,000	Rs.4,000	Rs.4,000	JV-1 New Asset A/c. Dr. To Old Asset A/c. To Cash/Creditor A/c.	10000	4000 6000
2	Rs.10,000	Rs.4,000	Rs.2,000	JV-1 New Asset A/c. Dr. To Old Asset A/c. To Cash/Creditor A/c. JV-2 P & L A/c. Dr. Old Asset A/c.	10000 2000	2000 8000 2000
3	Rs.10,000	Rs.4,000	Rs.6,000	JV-1 New Asset A/c. Dr. To Old Asset A/c. To Cash/Creditor A/c. JV-2 Old Asset A/c. Dr. P & L A/c.	10000 2000	6000 4000 2000