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Capital expenditure
Accountancy
1- how expense incurred by firm to sell fixed assets is recorded in the books of accounts ? 2- a firm incurred a cost to demolish its building to construct a new bigger building so does the expenses for demolishing is capital expenditure??
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Hello, 1. Usually you prepare a separate account called asset disposal A/c, debit the asset and expenses to it, Credit the accumulated depreciation and sales proceed to it and finally arrive at profit/loss from sale which will be transferred to P&L. 2. Yes, such expenses will form part of the cost of asset.
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