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Accounting of fixed assets in exchange

AS 645 views 1 replies

Dear All!

Kindly clarify as to how accounting needs to be done in the following scenario in line with AS-10

The company has acquired a mobile phone costing Rs.22,000 by exchanging an old mobile which is taken for Rs.2,000 and paid the balance by cheque. The value of the old mobile in books is Re.0.

Is the Following accounting treatment correct?

Fixed Asset                           Dr               22000

                    To Bank                                                 20,000

                    To Profit on sale of Fixed Asset                 2,000

Replies (1)

The adjustment being done through above entry is correct.


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