GST Course

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

CA Parth Verma (NYU Stern Alumni )     20 June 2011

A/c entry for exchange purchase of fixed asset???????

hi frnds....

kindly give me explaination for a/c entry with regards to foloowing case....

we have a asset with a wdv of 20...... we puchase a new asset of 200 and exhange old one  and pay only 150....

that means the mkt value of old asset is 50.....

 

pls give me explaination on above...

thanks in advance:::__)))))



 23 Replies

Chiradeep.R.H

Chiradeep.R.H (Chirahi & Associates - Consultants)     20 June 2011

New Fixed Assets (Cost of New Asset)                                      200

                        To Bank A/c( Paid for New Asset)                                                  150

                         To Profit and loss A/c(Profit on sale of old Fixed asset)             30

                         To Old Asset A/c (WDV of old asset)                                               20

1 Like
Rajnikant Vadigoppula

Rajnikant Vadigoppula (CA, CS And CMA Final)     20 June 2011

yes i agree with chirag if provision for depreciation a/c  is not maintained.

if maintaned then following entry should be passed

Asset a/c.............................................Dr    200

         To Bank a/c                                                  150

          To Asset Disposal a/c                                 50

 

Asset Disposal a/c............................Dr   ( cost of asset sold )

           To Asset a/c

 

Provision for Depreciation a/c ........Dr    (depreciation till date)

               To Asset Disposal a/c                                                                         

WDV= Cost - Depreciation Till date


Asset Disposal a/c ..........................Dr    30

         To Profit and Loss A/c                               30

CA abhinandan agarwal

CA abhinandan agarwal (CA CS Bcom(H))     20 June 2011

 

ew Fixed Assets (Cost of New Asset)                                      200

                        Bank A/c( Paid for New Asset)                                                  150

                         Profit and loss A/c                                                                     30

                         Old Asset a/c                                                                             20



(Guest)

right guys.................thanks to all.............!!!!!!

CA Parth Verma

CA Parth Verma (NYU Stern Alumni )     20 June 2011

thank u buddies

@*CS Siddharth Bumb. *

@*CS Siddharth Bumb. * (B.Com, CA Final, CS )     21 June 2011

Originally posted by : Chiradeep.R.H

New Fixed Assets (Cost of New Asset)                                      200

                        To Bank A/c( Paid for New Asset)                                                  150

                         To Profit and loss A/c(Profit on sale of old Fixed asset)             30

                         To Old Asset A/c (WDV of old asset)                                               20
Rakesh Kumawat

Rakesh Kumawat (rrk_kumawat@yahoo.co.in)     22 June 2011

agree witth chiradeep

abduljawad

abduljawad (accountant)     18 September 2011

 

hi frnds....

kindly give me explaination

    We purchased a new laptop on credit from ‘A’ and sold an old laptop to the same supplier:- Cost of new Laptop : £ 50000 Cost of old laptop : £ 75000 Accumulated Depreciation : £ 45000 Exchange price of old laptop : £ 5000

Write a journal entry. this is the question they ask me in one of interview

Chiradeep.R.H

Chiradeep.R.H (Chirahi & Associates - Consultants)     18 September 2011

If Buyer is getting Rs.5000 in exchange , the entry will be as follows

New Laptop A/c                   Dr                         50000

Acc.deprn A/c                       Dr                          45000
Bank A/c                                Dr                            5000

                                To Old laptop                                                                            75000
                                To Profit on sale of Fixed Assets                                          25000
 
If Buyer is paying Rs.5000 in exchange , the entry will be as follows

New Laptop A/c                   Dr                         50000

Acc.deprn A/c                       Dr                          45000

                                To Old laptop                                                                            75000
                                To Profit on sale of Fixed Assets                                          15000

                                To Bank                                                                                      5000


1 Like
Bhaskar Unnikrishnan CPA CMA

Bhaskar Unnikrishnan CPA CMA (Accounts / Administration)     18 September 2011

New Laptop Dr.                                                50,000

P&L Dr (Loss on exchange of old laptop)   25,000

                      To PArty                                                           45,000

                      To Old Laptop (WDV)                                   30,000 

 

WDV of old laptop  (75,000-45,000) = 30,000

Less Exchage Value                           =  5,000

Loss on Transaction                          = 25,000

Chiradeep.R.H

Chiradeep.R.H (Chirahi & Associates - Consultants)     18 September 2011

Mr.Abdul I thought you exchanged old Asset with a new asset.

Please correct me If am wrong.

If it is purchased on credit and old asset sold at Rs.5000, why you mentioned it as exchange price.

Bhaskar Unnikrishnan CPA CMA

Bhaskar Unnikrishnan CPA CMA (Accounts / Administration)     18 September 2011

Dear Chiradeep,

 

can you explain how comes there is profit on exchange of old asset? WDV of old asset is 30,000 and selling for Just 5,000, so there must be loss of 25,000 right???

 

Regards,

Bhaskar

Chiradeep.R.H

Chiradeep.R.H (Chirahi & Associates - Consultants)     19 September 2011

Query :

"We purchased a new laptop on credit from ‘A’ and sold an old laptop to the same supplier:- Cost of new Laptop : £ 50000 Cost of old laptop : £ 75000 Accumulated Depreciation : £ 45000 Exchange price of old laptop : £ 5000'' Write J.E.

Dear Bhaskar,

Here in the above query the author had mentioned, the exchange price as Rs.5000/-. I understood that the old asset has exchanged for new assetand they are not paying anything for the new asset in exchanging old other than paying Rs.5,000/-.

So My profit Calculation will be

Wdv of old Asset -30000 less exchange price Rs.5000 = Loss is Rs.25000 and New asset Cost is 50000. So profit will be Rs.25000.

Please correct me if am wrong.

Thanks 

 

 

 

Bhaskar Unnikrishnan CPA CMA

Bhaskar Unnikrishnan CPA CMA (Accounts / Administration)     19 September 2011

Dear Charadeep,

 

As he has mentioned Exchange price as 5,000, it is apparent that he has to pay the remaining amount to the supplier. He has purchased new one and sold the same to the supplier, so he has to pay remaining 45,000 to the supplier, not just exchanged. It is my understanding.

 

Regards,

Bhaskar


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Related Threads


Loading
Start a New Discussion

Popular Discussion


view more »





Subscribe to the latest topics :
Search Forum:

Trending Tags