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Former Member

Asset Accounting postings

Hi

I'd like to know the accounting entries of the various asset postings to the General Ledger, e.g. an aquistion with/without customer, scrapping, depreciation etc.

Please assist - your co-operation would be highly appreciated.

Please mail to haroonl@pg.co.za

Regards

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  • author's profile photo Former Member
    Former Member
    Posted on Apr 19, 2006 at 08:53 PM

    Hi

    The following would be the accounting entries

    acquisition through PO route

    Dr Asset

    Cr Gr/IR

    Scrapping

    Dr Accumulated Dep

    Cr Asset

    Dr Loss on scrapping of asset ( configured in AO90)

    Depreciation

    Dr Depreciation (expenses account)

    Cr Accumulated Depreciation (B/S recon account for asset)

    Sale of asset with customer

    Dr Customer

    Dr Accumulated Dep

    Cr Asset

    Dr/Cr profit or loss on sale of asset

    Regards

    Sriram Balu

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 04, 2007 at 10:25 AM

    The above entries are correct, but for better understanding I have given the entries with the examples.

    At the time of Purchase of Assets ( Not through the purchase order but through normal process)

    Asset A/c $10,000

    To Vendor A/c $10,000

    Depreciation using (Accumulated Depreciation Method)

    Depreciation A/c Dr $1,000

    To Accumulated Depreciation A/c $1,000

    Profit & Loss A/c Dr $1,000

    To Depreciation A/c $1,000

    Net Asset Value as on Balance Sheet Date

    Acquisition Value $10,000

    Less Depreciation ($1,000)

    Net Asset Value $9,000

    (WDV)

    When u scrap the asset with out customer means without revenue i.e entire amount is loss (excluding Depreciation)

    Accumulated Depreciation A/c Dr $1,000

    Loss on Sale of Asset A/c Dr $9,000

    Asset Value $10,000

    When u sold the asset to the customer, then there are two situations

    1. With Profit ( Assuming Asset has been sold at $11000)

    Customer A/C Dr $11,000

    Accumulated Depn A/c $ 1,000

    To Asset Acccount $10,000

    To Profit on Sale of Asset A/C $ 2,000

    2. With Loss. Asset has been sold at $ 6000

    Customer A/C Dr $6,000

    Accumulated Depn A/cDr $1,000

    Loss on Sale of Asset A/cDr $3,000

    I hope this examples entries will clear your doubts. Please let me know if you still not convinced.

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