COMPANY PURCHASED ASSET FOR RS.500000/-
ACCUMULATED DEPRECIATION - RS.200000/-
WDV OF THE ASSET - RS.300000/-
COMPANY SOLD THE ASSET FOR RS.700000/-
HOW MUCH PROFIT TO BE TRANSFERRED TO PROFIT AND LOSS ACCOUNT AND HOW MUCH PROFIT TO BE TRANSFERRED TO CAPITAL RESERVE ACCOUNT
100% of the profit should be transferred to Profit and Loss. THERE IS NO SUCH CONCEPT that if you recover over the WDV of an asset or over the cost of the asset then such excess will go into capital reserve.
Reproducing para 14.3 of AS-10
Shyam S Gupta and Company
New Delhi
CA Inter
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M N Rao & Associates LLP
Vijayawada
CA Inter
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CCI
Pro
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