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One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry?
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One machine whose value in books as on 1st April stood at Rs. 12,000 w...
Rectifying Entry for Disposal of Machinery
The following are the steps to prepare the rectifying entry for disposal of machinery:
1. Calculate the Depreciation
Since no depreciation needs to be provided on machinery disposed of during the year, we need not calculate the depreciation.
2. Calculate the Gain or Loss on Sale
The gain or loss on the sale of machinery can be calculated as follows:
Sale Proceeds = Rs. 8,750
Book Value = Rs. 12,000
Loss on Sale = Book Value - Sale Proceeds
= Rs. 12,000 - Rs. 8,750
= Rs. 3,250
3. Prepare the Rectifying Entry
The rectifying entry for disposal of machinery is as follows:
Particulars | Debit | Credit
--- | --- | ---
Bank A/c | - | Rs. 10,250
Loss on Sale of Machinery A/c | Rs. 3,250 | -
Machinery A/c | Rs. 12,000 | -
To New Machinery A/c | - | Rs. 19,000
Explanation:
- Bank A/c is debited since the amount received from the sale of machinery is credited to the bank account.
- Loss on Sale of Machinery A/c is debited to record the loss on the sale of machinery.
- Machinery A/c is credited to remove the asset from the books of accounts.
- New Machinery A/c is credited to record the purchase of a new machinery.
Conclusion
Hence, the rectifying entry for disposal of machinery is prepared as per the above steps. It is important to prepare rectifying entries to correct any errors or omissions in the books of accounts.
The following are the steps to prepare the rectifying entry for disposal of machinery:
1. Calculate the Depreciation
Since no depreciation needs to be provided on machinery disposed of during the year, we need not calculate the depreciation.
2. Calculate the Gain or Loss on Sale
The gain or loss on the sale of machinery can be calculated as follows:
Sale Proceeds = Rs. 8,750
Book Value = Rs. 12,000
Loss on Sale = Book Value - Sale Proceeds
= Rs. 12,000 - Rs. 8,750
= Rs. 3,250
3. Prepare the Rectifying Entry
The rectifying entry for disposal of machinery is as follows:
Particulars | Debit | Credit
--- | --- | ---
Bank A/c | - | Rs. 10,250
Loss on Sale of Machinery A/c | Rs. 3,250 | -
Machinery A/c | Rs. 12,000 | -
To New Machinery A/c | - | Rs. 19,000
Explanation:
- Bank A/c is debited since the amount received from the sale of machinery is credited to the bank account.
- Loss on Sale of Machinery A/c is debited to record the loss on the sale of machinery.
- Machinery A/c is credited to remove the asset from the books of accounts.
- New Machinery A/c is credited to record the purchase of a new machinery.
Conclusion
Hence, the rectifying entry for disposal of machinery is prepared as per the above steps. It is important to prepare rectifying entries to correct any errors or omissions in the books of accounts.
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One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry?
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One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry?.
One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for One machine whose value in books as on 1st April stood at Rs. 12,000 was disposed off on 31 Dec. for Rs. 8,750 in part exchange for a new machine costing Rs. 19,000 and an invoice for the net amount of Rs. 10,250 was entered in books. No depreciation need be provided on machinery disposed off during the year. what would be rectifying entry?.
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