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bigdaddie · Jul 23, 2012, 01:28 PM

Let suppose that the opening balance on a Motor vecle account is $500 000, and at the end of the year the value on the Motor vehicle account was $350 500. What would be the accounting entries if one Motor vehicle valued $40 000 was sold for $32 700. How would this e treated in an income statement?

NB. No cost price of the asset sold was given ony the value.

paraclete · Jul 23, 2012, 03:56 PM

Originally Posted by bigdaddie

Let suppose that the opening balance on a Motor vecle account is $500 000, and at the end of the year the value on the Motor vehicle account was $350 500. What would be the accounting entries if one Motor vehicle valued $40 000 was sold for $32 700. How would this e treated in an income statement?

NB. No cost price of the asset sold was given ony the value.

it is usual for asset accounts to deal with either cost or valuation but not with a mixture of the two systems.

In the income statement the difference between the depreciated value of the vehicle and the realisation would appear as either a profit on sale of asset or a loss.

Similarly if the asset was carried at valuation the income statement would include the difference between the depreciated value of the vehicle and the realisation would appear as either a profit on sale of asset or a loss.