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Hi Sir,
1) Regarding the above question , I have confusion in the adjustments. I understood that cost – 10 m and acc dep – 9 m . so carrying value is 1 m . Now in the cashflow its written loss on disposal is 1.5 m . sir how come they got this values?2) In acc dep a/c we remove the 9m ryt ? as how we remove the 10m cost from the NCA – Cost a/c . Am i ryt ?
3) If the loss is 1.5 m they why dont we take that loss in the NCA cost a/c credit side ?
Please explain me in a detailed form .
There was an unexpected cost of removing the displays of $500,000
Take $10m off the cost and $9m off the accumulated depreciation
We (in summary) take $1m off the NCA. The $500,000 was an unforeseen expense and the entry was:
Dr Removal costs 500,000
Cr Cash 500,000OK?
My second sentence answered your second point and my third sentence answered your third point!
Read your questions again but this time read my response immediately after.
If you still have a problem, post again – no worries
Ok?
i understood sir.
sir , the loss and profit on disposal of propert plant and equipment , when we take a T a/c we wont take that into the T a/c ryt ?The profit or the loss on disposal of an asset is the balancing figure in the T account. If the sale results in a profit on disposal, the balancing figure will be on the debit side with the credit entry going to Profit or Loss account.
Were you exempt paper F3?
sir but in the T account of PPE profit and loss will not come ryt ?
It will come only in suppose PPE disposal a/c ryt ?I ask again – were you exempt paper F3?
The Disposal Account will be double entered from the PPE Cost Account, the Accumulated Depreciation Account and the Cash Account.
The missing figure in the Disposal Account – the figure that makes the account balance – will be the profit or loss on disposal and that figure double enters to the Profit or Loss Account
Ok?
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