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Sold vehicle

kavar (teacher) (28 Points)

12 May 2014

I had a car of rs.3,50,000/-. I had made entry of it under group fixed asset with vehicle name. Now i have sold it in rs.1,50,000/-. I have loss of rs.2,00,000/-. Which type of entry should do of rs.2,00,000/-. & under which group?

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3 Replies

CA PRIYUL SHAH (JOB) (901 Points)
Replied 19 May 2014

Ledger should be "Loss from sale of Car" under group of "Indirect Expense"

Income Tax Wala: (Fin. Expert) (Chartered Accountants) (2010 Points)
Replied 20 May 2014

Dear Kaver

once an assets enter into a block of assets under fixed assets, it looses its individual identity

hence when you sold out car for INR 1.5 lac there is no need to recognize and loss or gain.

simply deduct 1.5 lac from total value of block of assets and on balance charge dep @ 15%

Thats it

V P Narasimhan (Accounts Manager) (791 Points)
Replied 20 May 2014

Dear

To find out theBook Value Depreciation has tobe considered for the period viz., Date of Purchase to Date of Sale. If the Amount recd > WDV = Profit on Sales of Asset If the Amount received < WDV = Loss on Sales of Asset.

NOTE: TAX (VAT) portion has to be considered & Tax Invoice to be raisedotherwise penalty willbe leviedby Sales Tax Dept with Interest. Hence Invoice can be raised WDV + Tax = Realisation Value (including Tax which has to be apid to the Dept)