Kumar Pradeep (Student) (56 Points)
18 August 2011Dear Sir/Mam,
Kindly inform me about the journal entry of the following :-
Q. Once A Businessman was going with his hors-cart to bring some goods for his day-to-day transaction of his business. In the way, the Horse died, so he decided to sell his cart & finally sold it for Rs.5000/-
(Original cost price of Horse is Rs.8000/- & of Cart is Rs.7000/-)
Kindly give the journal entry.
Thanking you,
Hari Wadhwa
(CA in Practice)
(485 Points)
Replied 12 October 2011
Journal entry can be passed as: -
Bank A/c Dr Rs 5000 (being cart sold)
Loss on sale of Cart Dr Rs 1000 (being cart of Rs 7000 having WDV of Rs 6000 sold at Rs 5000)
Accumulated Dep.on Cart A/c Dr Rs 1000 (Assumed Rs 1000 have been depreciated upto date of sale)
Died Horse A/c Dr Rs 8000 (being death of horse- A/c classified as Expense; No depreciation assumed as leaving entities are NOT depreciated)
To Horse A/c Rs 8000 (classified as a Fixed Asset A/c)
To Cart A/c Rs 7000 (Assumed Fixed Asset A/c & Accumulated Dep A/c are maintained separately)
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 13 October 2011
Cash A/c Dr 5,000
Loss on sale of cart 2,000
Depreciation (if Any)
Died Horse 8,000
To Horse 8,000
To Cart 7,000 (Less depreciation, if any)
CAclubindia
