accounting standard about acquiring of new asset

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Guest

Guest (Querist)

21 May 2009 sir my query is ..........

suppose a company traded in an old machine having a carrying amount of Rs.16800 and cash difference of Rs. 6000 for a new machine having total cash price of Rs. 20500.so my question is what would be the cost price of new machine?
whether it will be Rs.20500 or Rs.14500(Rs20500-Rs.6000)?

Amrit

Amrit (Expert)

21 May 2009 By looking ur case, W.D.V. of old machine is Rs.16800/- and sold for (20500-6000)=Rs.14500/-and with it Rs. 14,500( selling price as mutually agreed)+ Rs.6000/- in cash is paid for new machine.
So cost of new machine should be Rs. 14,500+Rs. 6,000/-= Rs. 20,500/-
and loss on sale of old machine will be 16800-14500=Rs.2,300/-

CA CS CMA Srinivasan N

CA CS CMA Srinivasan N (Expert)

22 May 2009 The above answer is correct. Only one aspect, the question is not clear whether the Sale price of Old Machine is Rs.14500 or Rs.6000

If it is 14500/- the above answer is correct.

If it is 6000 the loss on Sale of asset will be
WDV- Sale price = 16800-6000 = 10800

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