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Dec 08 Q2-Candel, On 1 Oct 07 an item of plant was disposal of for 2.5m cash.
My problem is this 2.5m removed from sales revenue (I am ok for it), where is it then? Why not in other comprehensive income when we are doing SI?Entries for disposal.
1)Dr. Disposal a/c 8m
Cr. Asset a/c 8m2)Dr. Accumulated depreciation 4m
Cr. Disposal a/c 4m3)Dr. cash 2.5m
Cr. Disposal a/c 2.5mCarrying value of asset is 8m-4m = 4m.
Disposed off @ 2.5m
Thus, loss on disposal is 4m-2.5m = 1.5m
this will be taken to the IS, under cost of sales.entry for loss on disposal is:
4)Dr. IS 1.5m
Cr. Disposal a/c 1.5mThanks, but why Dr. cash 2.5m is not shown in SoFP as Cash 2.5m or Bank offset bank overdraft 1.3m per question.
hi,
you are welcome!
Qn says, the proceeds of disposal have been treated as sales revenue by Candel; i.e, following entry was recorded:
Dr. Cash 2.5m
Cr. Sales 2.5m
Debit side is correctly entered. Thus, no more adjustments required for that.HI,
If the item if fully disposed… so after the disposal of item, will be showed or not?
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