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Sale of motor car of a school

Yasir (article assistant ) (470 Points)

06 August 2023

a school having a motor car wdv on 31-03-2022
rs 223607
sold on 21-11-2022 for rs 200000
how to pass journal entry for the transaction
and can depreciation will be provided till 21st November 2023

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9 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 06 August 2023

Yes, Depreciation will be provide.

After that book the car's sale value Rs.200000/-.

After (Depreciation Value + Sale value) these value balance amount will be book as "LOSS ON SALE OF CAR".

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prasad Nilugal ( GST Practitioner & Accounts ) (14811 Points)
Replied 06 August 2023

Bank A /c Dr
Depreciation A/c Dr
Loss on Sale ( car) A/c Dr
To Motor Car A/c Cr
( Motor Car sold )

Loss on Sale ( car) A/c will be transferred to Income & Expenditure account.

Income & Expenditure A/c Dr
To Loss on sale ( car) Cr
( Loss transfer entry)

Also transfer Depreciation to Income & Expenditure Account

Income & Expenditure A/c Dr

To Depreciation A/c Cr

( Depreciation transfer to Income & Expenditure Account )

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prasad Nilugal ( GST Practitioner & Accounts ) (14811 Points)
Replied 06 August 2023

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 06 August 2023

How to pass journal entry for the transaction :

1St provide Depreciation:

Depreciation A/c Dr - XXXX
To Motor Car A/c - XXXX

2nd Provide Sale:

Bank A/c Dr- XXXXXX
To Motor Car A/c - XXXXXX

3rd Provide Balance Transfer To Expenditure Account as it's to Loss Account:

LOSS ON SALE OF CAR A/c Dr - XXXX
To Motor Car A/c - XXXX

The journal entries are made then the car account as ZERO...

2 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14811 Points)
Replied 06 August 2023

Dose not make any difference, if you pass combine entry or single single entries, Motor Car account going to close in both the way .

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 06 August 2023

Yes, You are Correct.

But, I'm not saying any difference in this both way as Single Single entry or Combine entry.

1 Like

Yasaswi Gomes new (Finance ) (4524 Points)
Replied 06 August 2023

Lower of carrying amount and sale value and CA has depreciation but fair value is usually lower than ca. It could have been higher of ca or sale value

sabyasachi mukherjee (27603 Points)
Replied 08 August 2023

Raja
first you hv to provide for the depreciation..
1. depreciation Dr.
provision for depreciation cr.
2. provision for depreciation Dr.
motor car cr.
3. rest is OK.
except depreciation to be charged to profit and loss account.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 08 August 2023

Hello Mr Sabyasachi Mukherjee,

Are You reply to Me or Query...???
If me then its okay, I will try to understand your reply....

But,
If You note or type any name then put "Mr" before the name if You are professional...

Otherwise no need...