Tell the reason
This query is : Resolved
06 January 2009
when machinery is at cost is there then while preparing a/c of machinery disposal a/c then depreciation as charged at credit of it?
why?
why?
29 March 2012
If the Machine A/c is carried at cost, then yearly depreciation must have been booked to Accumulated Depreciation A/c by passing the following entry:
Depreciation A/c Dr
To Accumulated Depreciation
Accumulated depreciation will have a credit balance.
At the time of sale of machinery following entries shall be passed:
1. Machinery Disposal A/c Dr
To Machinery A/c
2. Accumulated Depreciation A/c Dr
To Machinery Disposal A/c
(Being depreciation expense transferred to disposal account)
Therefore, such depreciation will be credited to Machinery Disposal A/c
Depreciation A/c Dr
To Accumulated Depreciation
Accumulated depreciation will have a credit balance.
At the time of sale of machinery following entries shall be passed:
1. Machinery Disposal A/c Dr
To Machinery A/c
2. Accumulated Depreciation A/c Dr
To Machinery Disposal A/c
(Being depreciation expense transferred to disposal account)
Therefore, such depreciation will be credited to Machinery Disposal A/c
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