Asset Disposal
Trending Questions
The loss on sale of an asset is debited to
Reserves
Profit & Loss account
Asset`s account
Depreciation fund
The amount of depreciation charged on machinery is debited to
Depreciation account
Machinery account
Provision for depreciation account
Expense account
Gain or loss on disposal of an asset is the difference between the sale price of an asset and
the cost of that asset
the cost or valuation less depreciation up to the beginning of the year in which disposal took place
the cost of the asset less depreciation up to the end of the year in which disposal took place
the cost of the asset less accumulated depreciation up to the date of disposal
Which type of account is depreciation?
A manufacturing concern, whose books are closed on 31st Dec, purchased machinery for Rs 50, 000 on 1st January, 2008. Additional machinery was acquired for Rs 10, 000 on 1st July, 2010 and for Rs 16, 000 on 1st January, 2012. Machinery purchased for Rs 10, 000 on 1st July, 2010 was sold for Rs 5, 000 on 30th June, 2012. Show the machinery account for 5 years, writing off Depreciation @ 10% per annum on written down value.
Rectify the following errors assuming that suspensions account was opened. Ascertain the difference in trial balance.
(a) Furniture purchased for Rs. 10, 000 wrongly debited to purchase account as Rs. 4000
(b) Machinery purchased on credit from Raman for Rs. 20000 recorded through purchase book as Rs. 6000
(c) Repair of machinery Rs. 1400 debited to machinery account as Rs. 2400
(d) Repair on overhauling of secondhand machinery purchased Rs. 2000 was debited to repair account as Rs. 200
(e) Sale of old machinery at book value Rs. 3000 was credited to sales account as Rs. 5000
Salvage value means
cash to be paid when asset is disposed off
estimated disposal value
definite sale price of the asset
cash to be received when life of the asset ends
Vinod Ltd., purchased a Plant on 1st April, 2005 for Rs.15, 000. It purchased another plant on 1st October, 2005 costing Rs.20, 000 and on 1st July, 2006 costing Rs.30, 000. On 1st January, 2007 the Plant purchased on 1st April, 2005 became useless and was sold for Rs.2, 000. Show Plant Account charging 10 % p.a. depreciation by fixed instalment method for four years. The plant purchased on 1st October, 2005 was sold for Rs.8, 000 on 1st January, 2008. Accounts of the company are closed on 31st December each year.
Vinod Ltd., purchased a Machine on 1st January, 2007 for Rs.19, 400 and spent Rs.600 on its installation.On 1st July, in the same year additional machinery costing Rs.10, 000 was acquired.On 1st July, 209 the machinery purchased on January 1, 2007 having become useless was auctioned for Rs.8, 000 and on the same date new machine was purchased at a cost of Rs.15, 000.Depreciation is provided annually on 31st December @ 10% per annum on Original Cost of assets Prepare Machinery Account from 2007 to 2010.
What is the other name for straight-line depreciation?
What is the full form of SLM?
A machine costing Rs. 55, 000 has an expected useful life of 10 years. Depreciation is calculated on the diminishing balance method at the rate of 25%. At the end of year 5 the machine was actually disposed of for Rs. 15, 000. (Depreciation is charged in all years 1 - 5). The resulting gain or loss is ...........
Gain of Rs. 1, 948
Gain of Rs. 1, 500
Loss of Rs. 1, 500
Loss of Rs. 1, 948
Ganga Ltd purchased a machinery on January 1, 2001, for Rs 5, 50, 000 and spent Rs 50, 000 on its installation. On September 1, 2001, it purchased another machine for Rs 3, 70, 000. On May 01, 2002 it purchased another machine for Rs 8, 40, 000 (including installation expenses).
Depreciation was provided on machinery @ 10% per annum on original cost method annually on December 31. Prepare
(a) Machinery account and Depreciation account for the years 2001, 2002, 2003 and 2004.
(b) If depreciation is accumulated in the provision for Depreciation account, then prepare Machine account and Provision for depreciation account for the years 2001, 2002, 2003 and 2004.
When a machinery is sold at loss, which account is credited?
Expense account
Machinery account
Depreciation account
Accumulated depreciation account
A fixed asset costing Rs. 12, 000 was sold for Rs. 5, 000. At the date of disposal, it's net book value is Rs. 2, 000.
What is the profit or loss on disposal of this fixed asset?
Loss of Rs. 4, 000
Gain of Rs. 3, 000
Loss of Rs. 3, 000
Gain of Rs. 2, 000
A loss incurred on the disposal of plant and machinery should be debited to Profit or loss account. Is the statement true / false?
True
False
Not sure
None
An article was sold for with a profit of , what was its cost price?
In case of depreciation, which of the following is correct?
Asset account is debited & depreciation account is credited.
Profit & Loss account is credited & depreciation account is debited.
Asset account is credited & depreciation account is debited.
Trading account is debited & depreciation account is credited.
All of the following are required in order to calculate depreciation except for:
Expected disposal date
Cost
Residual value
Estimated life of the asset
On October 1, 2001, Juneja Transport Company purchased 2 trucks for Rs. 10, 00, 000 each. On July 1, 2003, one truck was involved in an accident and was completely destroyed and Rs. 6, 00, 000 were received from the insurance company in full settlement. On December 31, 2003, another truck was involved in an accident and destroyed partially, which was not insured. It was sold off for Rs. 1, 50, 000. On January 31, 2004, company purchased a fresh truck for Rs. 12, 00, 000. Depreciation is to be provided at 10 % per aunnm on the written down value every year. The books are closed every year on March 31. Give the Truck account from 2001 to 2004.
An enterprise sells on 1 January 2005 a van which it bought on 1 January 2002 for Rs. 3, 000, and has been depreciating the van each year at 10% per annum on a straight line basis. It trades this van for Rs. 5, 000.
What is the gain or loss on the disposal of the old van?
Gain of Rs. 2, 900
Gain of Rs. 2, 100
Loss of Rs. 1, 400
Loss of Rs. 9, 400
On 1st April, 2013, a merchant purchased a furniture costing Rs. 55, 000. It is estimated that its life is 10 years at the end of which it will be sold for Rs. 5, 000. Additions are made on 1st April, 2014 and 1st April, 2016 to the value of Rs. 9, 500 and Rs. 8, 800 (Residual values Rs.500 and Rs. 400 respectively). Show the furniture account for the first four years, if depreciation is written off according to the straight line method, and the merchant closes his books on 31st March, every year, assuming that the additions made to the furniture are an integral part of the furniture and will lose their utility with the expiration of the useful life of the original furniture.
On 1st January, 2005, VK Ltd. Purchased machinery for Rs.2, 40, 000 and on 30th June 2006, it acquired additional machinery at a cost of Rs.40, 000. On 31st March, 2007, one of the original machine (purchased on 1st January, 2005) which had cost of Rs.10, 000 was found to have become obsolete and was sold as scrap for Rs.1, 000. It was replaced on that date by a new machine costing Rs.16, 000. Depreciation is to be provided @ 15% p.a. on the written down value. Show machinery account by following calendar year.
The sale of equipment costing Rs16, 000 with accumulated depreciation of Rs13, 400 and sale price of Rs4, 000 would result in a:
Gain of Rs1, 400
Gain of Rs4, 000
Loss of Rs1, 400
Loss of Rs9, 400
Pronto Pack Ltd. sells its old packaging machine for Rs. 300 on 31 December 2005. The machine was bought during the year ended 31 December 2000 for Rs. 10, 000. Depreciation on plant and machinery is charged at 20% on a straight-line basis. The effect due to disposal of machine is:
Loss of Rs. 400
Gain of Rs. 200
Loss of Rs. 300
Gain of Rs. 300
What does WDV stand for in depreciation?
Why do companies use the straight line method?
Which is the simplest method of depreciation?
An iron was bought for and sold at a gain of . Find for how much did the person sell the iron.
On June 30, 2011, a business sold an asset for Rs1, 500 that costed Rs 5, 000. The asset had a 5-year useful life, no salvage value, and had been used by the business since January 1, 2008. Straight-line depreciation was used. The fiscal year ends on December 31. What was the result of selling the plant asset?
No gain or loss on the disposal of asset
Rs 1, 000 gain on the disposal of asset
Rs 500 loss on the disposal of asset
Rs 500 unrecognized gain on the sale of a asset.
