How do you calculate the gain or loss when an asset is sold?
To calculate the gain or loss on the sale of an asset, you compare the amount of cash received for the asset to the asset’s book (carrying) value at the time of the sale. If the cash received is greater than the asset’s book value, the difference is recorded as a gain. If the cash received is less than the asset’s book value, the difference is recorded as a loss.
In order to have the book value at the time of the sale, you must record the depreciation expense up to the date of the sale.
If the asset is exchanged instead of sold, the accounting treatment will often be different.
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what are the entries that you must entre when fixed asset are dispose off.
What’s the proper treatment of the costs of disposal, such as legal fees and realtors fees?
Thank you vrey much . I understant better than I learn from school by learnig your web.
(a): entry for cash received is recorded compared with nbv (b): entry for acc depreciation reversal for disposal of asset (c): entry for recording gain/(loss).
what if theres a trade in?? how do i calculate the profit/loss on disposal??.. what is the double entry to record it??