Question

one of the companies had a car since 1/1/2010 at a cost of 900,000 SR, and...

one of the companies had a car since 1/1/2010 at a cost of 900,000 SR, and its life span is ten years and depreciated using the straight-line method and has no value as scrap. On 1/2014/2014 the car was sold for SR 450,000.

Required

Calculating book value and selling result of the instrument

Preparing the necessary daily entries for 2014

Business   Accounting   
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Homework Answers

Answer #1

Solution:

Annual depreciation on car = 900000/10 = 90000 SR

Depreciation charged from 2010 to 2013 = 90000*4 = 360000 SR

Book value of Car = 900000 - 360000 = 540000 SR

Sale value of car = 450000 SR

Loss on sale of Car = 540000 - 450000 = 90000 SR

Journal Entries
Date Particulars Debit Credit
1-Jan-14 Cash Dr $450,000.00
Accumulated Depreciation - Vehicle $360,000.00
Loss on sale of fixed assets Dr $90,000.00
          To Vehicle $900,000.00
(To record sale of car)
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