LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Acounting entry for exchange of vehicle for vehicle dealer

dhara (accountant) (24 Points)

18 February 2015

sir,

new vehicle selling price= 190000

old vehicle taken as exchange price=50000

additional cost incurred on old vehicle =5690

old vehicle sold =62000

please provide accounting entry for exchange on the same for vehicle dealer

Reply
Follow
Share

5 Replies

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (3293 Points)
Replied 18 February 2015

For additional cost for old vehicle the entry will be Old vehicle a/c Dr

To Bank/cash a/c

For exchange of vehicle: New vehicle a/c Dr ( with new vehicle price)

To Old vehicle a/c (with old price)

To Dealer a/c or Bank a/c( balance amount)

Ganesh Mulwad (Accountant) (26 Points)
Replied 18 February 2015

For exchange of vehicle: What will be the Old vehicle amt. Nd wht abt the old vehicle selling price

Anup A Deshpande (Freelancer) (77 Points)
Replied 18 February 2015

We don't book unrealised gain (conservatism principle). So if "old vehicle sold = 62000" is expected selling price then it is to be ignored. However if that is carrying amount (i.e. cost - depreciation) and in reality old vehicle was exchanged for lesser value then, difference would be loss on exchange.

J. K. Ratan (Compliance Advisor) (794 Points)
Replied 18 February 2015

Dear Sudha 1:- Purchaser A/c Dr. 140000 Old vehicle A/c Dr. 50000 To New Vehicle Sale 190000 2:- Old Vehicle Dr. 5690 To Cash/ Bank 3:- Vendor/Cash/Bank Dr. 62000 To Old Vehicle 55690 To P/L. 6310