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.

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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.

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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.