Problem from AS-10

On 1-4-2008 B Ltd had sold some of its fixed assets for Rs.200 lakhs (written down value Rs.500 lakhs), these assets were revalued earlier.  As on 1-4-2008 the revaluation reserve corresponding to these assets stood at Rs.400 lakhs.  The profit on sale of property Rs.400 lakhs shown in the profit and loss statement represented the transfer of this amount.  Loss on sale of asset was included in the cost of goods sold.  Comment

 

I am not able to understand this problem.  Please help me to understand this question and solve it for me.

 

Thanks in advance

Replies (3)

 THIS QUESTION IS ASKING YOU TO DO TREATMENT AFTER SALE OF ASSET.

 

THE TREATMENT WILL BE AS UNDER:

THJE LOSS WILL BE WRITTN OFF FROM REVALUATION RESERVE INSTEAD OF TRANSFERRING TO P&L A/C.AND THE BALANCE REMAINING IN THE REVALUATION RESERVE IS TRANSFERRED TO GENERAL RESERVE.

 

HOPE YOU FIND ME CLEAR.

 

REGARDS,

 

CA RITESH KOTHARI

He is right.

bingo......

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