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Part exchange allowance

Ppinkyjovin1239y ago
Bobbin runs a business altering and repairing clothes.When she started business on 1st January 20x2 she bought a Soopastitch sewing machine for $2500..She depreciates sewing machines using the straight line method at a rate of 20% p.a and she charged 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 advance Soopastitch during Dec 20x5.The Soopastitch salesman has offered her a part exchange deal as follows: PEA for old Soopastitch $750 Balance to be paid in cash for advanced Soopastitch $4850 Could you please tell me the amount to write for the below ledger entries: PEA Dr Nc assets cost account (part of cost of new asset) Cr disposals a/c (sale proceeds of old asset) Cash paid Dr NC asset cost account Cr Cash account
John MoffatJohn MoffatTutor9y ago#1
Dr Nc assets cost account (part of cost of new asset) $750 Cr disposals a/c (sale proceeds of old asset) $750 Dr NC asset cost account $4850 Cr Cash account $4850
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