as regards to the question on stock valuatioans. to this n pls send email chigbogwuoscar@yahoo.com qus. as regard to disposal of Asset can one tell me the accounting procedure in recordind it and how it should be treted in profit and loss a/c and balance sheet when sold at a profit and at a loss
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by OSCAR ISRAEL</i>
<br />as regards to the question on stock valuatioans. to this n pls send email chigbogwuoscar@yahoo.com qus. as regard to disposal of Asset can one tell me the accounting procedure in recordind it and how it should be treted in profit and loss a/c and balance sheet when sold at a profit and at a loss
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Disposals of Fixed Assets
Think of it as two elements -
1) the disposal; and
2)the profit/loss on sale.
1) To dispose of an asset you need to remove it from fixed assets - therefore cost and accumlated depreciation both need removing - with the net book value going to the "Sale of Fixed Assets" in the P&L a/c. This latter entry will be a debit (or zero if completely written down).
2) Once the asset has been removed you are half way there - all you need to then do is match up the proceeds. These will either come from the bank or cash account or perhaps a sales invoice. Basically, wherever they come from you want to ensure that the credit entry of the transaction goes to the "Sale of Fixed Assets" in the P&L a/c. The resultant debit or credit on this account is then your loss or profit on disposal.
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