PLS SOLVE MY A/C ENTRY PROBLEM

thanks CA ABHISHEK 

i have corrected my mistake

 

Originally posted by : CA ABHISHEK
	the above entry is in cash book and in p&l it will be debited.

 agree

Hi friends, just refer AS 10 and AS 9... The entries, some of u suggested r correct wid minor mistakes... As per given situation, following entries need to be passed..... (sorry, using cell, so format of entries may not b that cool)...... 1. Initially tranfer prov for dep to machinery of rs. 400..... 2. Now, sale entry is passed, so debit cash by 5200, credit machine by 3600 and simultaneously debit commission by 320 (commission is to b considered as DIRECTLY ATTRIBUTABLE SALE EXPENDITURE) credit cash by 320.. Effectively, v credit P&L a.c by 1280..... 3. Finally, pass entry for wages paid of rs. 50

I agree with Kriti,

As the Commission & wages are being incurred for the purpose of removal of the machinery at the time of disposal, these to are considered as expenses charged.

 

The profit shall be Rs.1970.00 is correct.

@ Navya ,

If we pass an entry as you suggest, then you will get credited Rs.370 in P&L or get reduced the expenses, agree....... How would you close the credit balance in Commission & wages ? whether it comes to P&L credit side....... nothing but income.... agreed ?

@ Rajesh Kumar,

You are suggesting to pass one more entry for booking of the expenses,  by debting to concerned a/c & credit cash, theeffect is one & the same.

 

Depriciation   DR    400
Machinery account     400
Commission Account   320
Wages Account             50
Cash		370
Cash Account               5200
Machinery account		5200
Machinery account DR		1970
Profit on sale of Machinery  1970
Short term gain applicable