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

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

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

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

thank u buddies

agree witth chiradeep

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

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

New Laptop A/c                   Dr                         50000

                                To Bank                                                                                      5000

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

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.

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

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 

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