[Rehan_Chaudhary]

I have bought an asset of 1 million today at 10% depreciation per yeaar... now I have to pass double entry in which I would forecast the future value of an asset after 10 years... what is that entry

[morgaine300]

I don't understand the question. Entries don't "forecast future values." Entries take care of the here and now. And entries don't cover 10 years.

But a depreciation entry is to debit depreciation expense and credit accumulated depreciation.

[Rehan_Chaudhary]

I know entries don't forecast future... but I am doing SAP and my instructor asked me this question, I have given this ans but he gave me one week time to get ans...
What would be the first voucher entry at the time of purchase ?

[morgaine300]

You're the one who said something about the entry to forecast the future. And you are not quoting the question - you are asking - "now I have to pass double entry." It really helps a lot if you can quote the problem verbatim, so we can distinguish between what the problem says and what you are saying.

The purchase of any asset is a debit to the asset, and a credit either to cash if any cash was paid, and/or some type of payable if part was financed. There are theoretically other entries that could be made, but not likely.

An entry has to consist of at least two things. "Asset" is only one thing and the question states nothing about the circumstances of its purchase.

[Rehan_Chaudhary]

Question which my instructor has asked me is
"the question is:
ABC industry has purchased and asset of value 18 milloin @ useful life of 10 years.
now you have to pass the double entry in purchase voucher.
one entry is ASSET to CASH and what would be the second entry?
and what is the future value of this asset after 5 Years?"

[morgaine300]

I can only assume the second entry being referred to is the depreciation that would have to be done later that year, which I already told you.

"Future value" is not really a good term. I have to assume she means its book value. If it's 10% a year, then how is that? And if you do that for 5 years, how much have you depreciated.