Contamination fixed assets.

Dear Sir/madam,

What are the journal  entries in following cases.

1.  Value of Assets is zero due to depreciation but now we are selling   the same Assets (scrap) in some value. 

Note:  We have made the following entires during Procurement and Depreciation booking.

During Procurement : Dr. Assets (equipment)

                                   Cr.  Bank a/c

 

During Depreciation: Dr. Depreciation (equipment)

                                  Cr.Provision for Depreciation  (equipment)

Thankyou in advance 

Yogendra Chettri

Replies (4)
You will have to book profit in your p & l account
entry would be:
Bank a/c Dr
To profit on sale of fixed assets a/c

1. adj entry ( provision for depreciation to be transferred to fixed asset a/c

Provision for depreciation a/c   Dr.

      To fixed asset A/c

2. on sale of fixed asset

Bank A/c                                 Dr.

      To Fixed asset

3. Profit on sale of fixed asset. (balancing figure of fixed asset is to be transferred to profit and loss A/c)

Fixed Asset A/c                Dr.

     To Profit and loss a/c   

2&3 entry can be combined.

Fixed Assets are those assets which have useful life of more than 1 year and these assets are used in business and substaintial cost is incurred in purchasing these assets. Fixed assets can be divided on the basis of two things.

  1. Depreciation
  2. Tangibility

https://www.tendersontime.com/publish-tender/fixed-assets.H T M L

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