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Hello sir
Could you please show me the ledger entries of the below question ??
Bindi runs a business altering and repairing clothes.When she started business on 1 January 20×2 she bought a soopastitch IIsewing machine for $2500.She depreciated sewing machines using the straight line method at a rate of 20% p .a and she charges a full year of depreciation in the year of acquisition and none in the year of disposal.
The business has now grown such that she needs a faster machine,and she will upgrade to the soopastitch V during December 20×5.The soopastitch salesman has offered her a part exchange deal as follows.
Part exchange allowance for soopastitch II $750
Balance to be paid in cash for soopastitch V $4850
Show the ledger entries for the year ended 31 December 20×5 to reflect this transaction.
The entries when the new assets purchased are as follows:
DR Asset account with the cost of the new asset: 5,600
CR Cash with the amount paid in cash: 4,850
CR Disposal account with the amount given for the old asset: 750All the other entries are exactly as explained in my free lectures.
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Sir,
Is the other entries are the below ones:
Dr disposals a/c
Cr NC assets cost a/cDr accumulated depreciation
Cr disposalsSir,Could you please help me with the amounts too
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