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also that the proceeds have been put in the cash book, so the total in cash in bank on the balance sheet is correct and needs no adjustment ? Is cash in bank same terminology as a cash account in the ledger ?
Please ignore my last question on my last reply, I realise the double entry required cr plant and equipment account and debit disposal account. so cost on the balance sheet will reduce by 1400,000.
HI John, thank you for this, I am still learning about little details, like what does 50c mean, and how do you work out the split of share premium and share capital. Sorry when I put 5000 I meant 5000,000 my mistake. How do we know that the suspense account is a credit balance and not a debit balance, it it because it appeared under the equity and liability on the sofp? Little details like this I am still not clear about. Would the loss of the sale of the plant reduce the profit by increasing the expense account on the profit and loss ? also for the depreciation would we reduce the plant accumulated depreciation by 0.25 x 40000000? you mentioned that the double entry of this in another post goes back to retained earnings , but why?
on the end of the second to last of your paragraph, you mention the cost needs changing, since the value of the plant is 1400000 before depreciation, so the cost would be reduced by that? is there a double entry for this?
So in theory there should be two different T accounts, one for accured income and one for accounts receivable? Both being asset accounts?
