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General Accounting Discussions: Sales of Fixed Asset

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  1.  
    • CommentAuthorAdem
    • CommentTimeJan 19th 2008
     
    When fixed asset purchased on $ 10,000 , $ 5000 IS Paid on cash and $ 5000 on credit, then the fixed asset sold after 1 moth, at $ 15000. What will be the transactions when it is purchased and after it is sold.
    • CommentAuthoraccteacher
    • CommentTimeJan 19th 2008
     
    Not sure but think this would be the transaction
    Dr Fixed Asset Account 10000
    Cr Creditor account 5000 (r u given d name of d creditor?)
    Cr Cash 5000

    not at al sure bout the next transaction butt it might be
    Dr Bank 15000
    CR Fixed Asset 15000
    that would leave your fixed asset account with a credit balance of 5000 which would be very unusual. It is very strange that the company would make a profit out of fixed assets for example a motor vehicle drops the very minute its bought. do you know what the type of business the company is it and also what is the fixed asset?
    • CommentAuthoraakbar
    • CommentTimeJan 20th 2008
     
    entry for sale of fixed asset would be
    Cash/Bank Dr 15000
    Fixed Asset Cr 10000
    Profit on Sale of FA 5000

    (u need to consider depriciation exps also)

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