Question

how will the fixed assets account will be made for the following information:-
fixed assets opening balance-1,86,800 ; fixed assets closing balance-3,32,000; and adjustment given is-depriciation on fixed assets 40,000.an assest whose book value was 15000 and depriciation on it 7000 was sold for 9000.

Answer 1

Dear Student,

The solution to your query is provided below:

Fixed Asset Account
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
	Balance b/d	1,86,800			Depreciation A/c	40,000
	Profit and Loss A/c (profit on sale)	1,000			Depreciation A/c (depreciation on the sold machinery)	7,000
	Bank A/c (Purchase)	2,00,200			Bank A/c (sale proceeds)	9,000
					Balance c/d	3,32,000
		3,88,000				3,88,000

*Amount realised from sale of the asset is shown on the credit side of the Fixed Asset Account.

Working Notes: Calculation of Profit or Loss on Sale

Particulars	Amount
Book Value	15,000
Less: Depreciation	7,000
Value on the date of sale	8,000
Less: Sale Value	9,000
Profit on Sale	1,000