PLS SOLVE MY A/C ENTRY PROBLEM

Page no : 2

Ankur (Ipcc student) (332 Points)
Replied 23 November 2010

thanks CA ABHISHEK

i have corrected my mistake

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Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 23 November 2010

Originally posted by : CA ABHISHEK
	the above entry is in cash book and in p&l it will be debited.

agree

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 23 November 2010

Hi friends, just refer AS 10 and AS 9... The entries, some of u suggested r correct wid minor mistakes... As per given situation, following entries need to be passed..... (sorry, using cell, so format of entries may not b that cool)...... 1. Initially tranfer prov for dep to machinery of rs. 400..... 2. Now, sale entry is passed, so debit cash by 5200, credit machine by 3600 and simultaneously debit commission by 320 (commission is to b considered as DIRECTLY ATTRIBUTABLE SALE EXPENDITURE) credit cash by 320.. Effectively, v credit P&L a.c by 1280..... 3. Finally, pass entry for wages paid of rs. 50

CA.Madhusudan B.P. (Chartered Accountant) (1157 Points)
Replied 23 November 2010

I agree with Kriti,

As the Commission & wages are being incurred for the purpose of removal of the machinery at the time of disposal, these to are considered as expenses charged.

The profit shall be Rs.1970.00 is correct.

@ Navya ,

If we pass an entry as you suggest, then you will get credited Rs.370 in P&L or get reduced the expenses, agree....... How would you close the credit balance in Commission & wages ? whether it comes to P&L credit side....... nothing but income.... agreed ?

@ Rajesh Kumar,

You are suggesting to pass one more entry for booking of the expenses, by debting to concerned a/c & credit cash, theeffect is one & the same.

Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 23 November 2010

Depriciation DR 400
Machinery account 400

Commission Account 320
Wages Account 50
Cash		370

Cash Account 5200

Machinery account		5200

Machinery account DR		1970

Profit on sale of Machinery 1970

Short term gain applicable