Accounting Treatment of Loss on Sale of Car

Treatment as per companies Act

As it is loss it shud be taken to P&L as usual.

Entry

P&L A/c Dr.                     150000

To Loss on sale of Car A/c          150000

Treatment as per Income tax act

If there is no other asset in the  Block of asset of which  the car  is a part , it can be claimed as a business expenditure. If there is any other asset in the car block then only depreciation can be claimed.

Treatment as per companies Act

As it is loss it shud be taken to P&L as usual.

Entry

1) Loss on sale of car         Dr     150000

     Bank / cash                       Dr     800000

     To car                                                          950000

2) P&L A/c          ..Dr.                        150000

     To Loss on sale of Car A/c                    150000

Treatment as per Income tax act

no depreciation will be allowed in the year of sale for the car.

block asset concept...

Entry should be

Loss on sale of car    a/c   Dr   

     To    Car Account            

Where as Car account is under Fixed assets and Loss on sale of Car is an Nominal Expenses which is a P&L A/c head

No depreciation will be taken for the year of sale to any assets.

The entry shuold be as per company act.,

The different of amount as per Income tax to be shown under Deffered tax liabilities or Assets

IF DEPRICIATION RESERVE RS.50000/-THEN WHAT IS TREATMENT ?

loss will be taken into account after the depreciation has been deducted afterthe depreciation deducted then the entry will depend upon the profit/loss

loss on sale of car

 P & L A/c. (loss)                                             Dr.

cash A/c.                                                           Dr.

                    To Car A/c.

Hello professional colleagues,

Can any body tell me what is treatment of loss on sale of asset theft and under which section it is to be treated.

Biswanath

09176691115

Hello,

Company has sold car in loss which was purchased in last year, but depreciation was not provided in last year due to loss booked.

Now in current year car has be sold, what will be the accounting treatment and this will effect company trading profit.

Hello,

Company has sold car in loss which was purchased in last year, but depreciation was not provided in last year due to loss booked.

Now in current year car has be sold, what will be the accounting treatment and this will effect company trading profit.