Prepare the journal entry to record the purchase of the machine?
A Company purchased a machinery on June 29, 2006, for $30,000. Freight costs came to $200. It cost $1,100 to install and test the machinery. On July 24, 2010, the machine broke down, the company decided to trade it in on a new machine. The new machine had a market value of $50,000, and trade-in allowance of $10,000 was given on the old machine, paid in cash. a) Prepare the journal entry of July 24, 2010.
Trade-in Journal Entry?
Cost of New Machine = $185,000 Cash Paid = $155,000 Value attributed to the old machine = $185,000 - $155,000 =$30,000 Old Machine Cost Value shown in books = $145,000 Accumulated Depreciation = $125,000 Written Down Value = $145,000 - $125,000 = $20,000 Profit on Sale of Old Machine = $30,000 - $20,000 = $10,000 Assuming that accumulated depreciation is being maintained in a separate reserve account and the asset account at its original cost. Dr. Accumulated Depreciation a/c $125,000 Cr. Asset (Old Machine) a/c $125,000 [For bringing up the asset to its written down value] Dr. Asset (New Machine ) a/c $185,000 Cr. Vendor a/c $185,000 [For the value of new machine and the amount payable to the vendor] Dr. Vendor a/c $185,000 Cr. Asset (Old Machine) a/c $30,000 Cr. Cash/Bank a/c $155,000 [For the dues to the vendor cleared] Dr. Asset (Old Machine) a/c $10,000 Cr. Profit/Loss a/c $10,000 [For the gain on transfer of old machine] We can combine all the above entries and pass a single journal entry as Dr. Asset a/c $40,000 Dr. Accumulated Depreciation a/c $125,000 Cr. Cash/Bank a/c $155,000 Cr. Profit/Loss a/c $10,000 http://www.futureaccountant.com/
What is the journal entry for having purchased a machine from a proprietor's savings bank account?
It depends on whether the sole proprietor wants to regard the money spent as a loan, or as a funds injection, i.e. equity. If it is to be regarded as a loan, the entries would be. Dr CashCr Creditor - Sole proprietorAfter that, it isDr Machine (Fixed Assets)Cr CashIf it is to be regarded as a fund injection, the entries would be. Dr CashCr Capital (Injection)After that, it isDr Machine (Fixed Assets)Cr Cash
What is the journal entry for goods stolen?
Journal entryLoss by theft a/c Dr.To purchases a/cExplanation- Since theft of goods is a loss to the organisation , so loss by theft a/c is debited. Also, stock purchased for sales were debited in Purchases a/c at the time of purchases, now since this stock not available for sale, so expense of purchases has to be reduced, that is why Purchases a/c is credited.I hope i solved your query.
What is the journal entry for purchasing goods worth Rs 50,000 from Saha Bros?
For Financial Accounting the solution can be :Purchase A/C DRPayables A/C( Saha Bros) CRFor Hybrid Accounting—-one plausible solution can be :Materials A/C DRPayables A/C CR(Account of Saha Bros)
What is the journal entry for carriage?
Carriage is of two types…!1) charge paid to make goods available at place of business ( i.e., on goods purchased for the purpose of sale) - which is termed as carriage inwards . It is a direct cost to business.2)charge paid to make goods available at customers place ( i.e., on goods sold by business to customers) - which is termed as carriage outwards. It is an indirect cost to business .Entry for above is journalised as follows:For carriage inwards..Carriage inwards A/C. DrTo bank/cash a/cSince it is direct cost ,it is transferred to trading a/cTrading a/c. Dr.To carriage inwards a/cFor carriage outwards..carriage outwards A/C. DrTo bank/cash a/c..Since carriage outwards is indirect cost it is transferred to P/L a/cP/L a/c. Dr.To carriage outwards a/c
Common stock dividend journal entry?
Stock dividends are recorded by moving amounts from retained earnings to the paid-in capital accounts. The amount to move depends on the size of the distribution; (1) a small stock dividend (generally less than 20-25% of the existing shares outstanding) is accounted for at market price on the date of declaration, and (2) a large stock dividend (generally over the 20-25% range) is accounted for at par value. Dr Retained earnings $2,000,000 (1,000,000 shares x 10% x $20) Cr Common stock $1,000,000 (1,000,000 shares x 10% x $10) Cr Paid in Capital in Excess of Par $1,000,000
What is the journal entry for purchased goods on credit?
Purchase a/c ……….DrTo Creditors a/c