accountants

Depreciation needs to be charged in the year of sale proportionately. So the depreciation amount will equal profit on sale of asset. Let me know if you need further clarification

first u can make the entry of profit on car sale n then u can avail the depreciation on this. m i right?

you should do the following entry

depretiation a/c Dr.               let's say 10000

     to asset a/c                                                            10000

so ur asset value will becum 90000 Rs.

then at the time of sale you have to pass entry as

Cash/bank       Dr.                  100000

           to Asset a/c                                           90000

           to profit an sale of asset a/c              10000

NOTE: pass the depretiation entry proportionately...............with respect to time

a) Book the entry for Depreciation for a period of Six Months:

Depreciation A/c Dr.

To Car A/c

b) Entry for sale of the Car:

Bank A/c Dr.

Loss on Sale of Car (If Sale is made on Loss) Dr.

To Car A/c ( Net Value)

To Profit on Sale of Car (If Sale is made on Profit)

because using of car for six month is should be deprecitaed by six month and if you sold it at the same price on which you purchased it then its your profit you can entered it first .1.

1.   depreciation A/c Dr.

           Assets (car) A/c Cr.

after this your book value of assets will reduce and you are saling at higher then book value so its profit .

2.    Bank  A/c  Dr.

          Assets (car) A/c Cr.

          profit on sale A/c Cr.

Entry for Depreciation: As per Companies Act, 1956, Depreciation will be provided on pro-rata basis (i.e. number of days basis)

Depreciation A/c  Dr.

Asset A/c  Cr.

Entry for sale of Asset:

Bank/Cash A/c  Dr.

Loss on Sale of Asset A/c  Dr. (If Loss)

Asset A/c Cr. (with Depreciated Value)

Profit on Sale of Car  Cr. (If Profit)