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I have worked out this problem. Please check the answer.
Answers (18)
Abhishek Purohit
Sir ,under gross method ,do we not deduct provision for depreciation from the asset at the time of disposal?
Yes and I have deducted. Please see working notes 4.
Thread Starter
Vijay KYes and I have deducted. Please see working notes 4.
It is not reflected in your asset account
Abhishek Purohit
It is not reflected in your asset account
In gross method depreciation prov is reflected in disposal account
Sriram Somayajula Admin
In gross method depreciation prov is reflected in disposal account
Ok sir , can we do directly as well?
Abhishek Purohit
Ok sir , can we do directly as well?
By crediting provision for depreciation to asset alc?
Abhishek Purohit
Ok sir , can we do directly as well?
In gross method, we can't do that directly. If we do that then that is net method not a gross method. We will deduct the provision of depreciation from that particular asset only at the balance sheet and not in the machinery account.
Abhishek Purohit
This is what I have seen at many places
But that is a very confusing way of passing the entry - moving of dep prov to disposal account is a lot more cleaner and simpler way of recording entries
Thread Starter
Vijay KSir suppose a question like this is asked for exam. And I wrote the answer in this same way with a neat presentation, can I get marks or I have add something more?
Everything is fine ,add even disposal alc showing the disposal proceeds recieved and amount transferred to Pand l
Thread Starter
Vijay KSir suppose a question like this is asked for exam. And I wrote the answer in this same way with a neat presentation, can I get marks or I have add something more?
Some of your Ledger account names, Narrations, Working notes need to be slightly more clearer especially depreciation computation and how mounts have been arrived at
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