Depreciation

hi shameer,

suppose an asset with cost - 100 and A. Depn - 40 is discarded

then entry willl be as follows:

Accumulated Depn A/c Dr. 40

Loss on asset discarded A/c Dr. 60

          To Asset(Original Cost) A/c      100

Regards,

Aman

First of all i would like to say that, if u sold the asset during the year, then no depreciation will be charged and the only entry will be..

party a/c dr

loss on sale of asset dr

to asset a/c

For Income tax purpose no entry is made.

but for accounting purpose we charge depreciation. take an exappmle.

wdv of asset =50 lacs rate of depreciation 10% (asset sold on 30september for Rs 25 lacs.)

entry will be as follows.

depreciation.....................................................dr      2.5 lacs

Bank/party..........................................................dr     25 lacs

loss on sale of asset.......................................dr     22.5 lacs

                          to asset account                                                             50 lacs