Student number: 216106559 accounting method

Published on
Scene 1 (0s)

Student number: 216106559 accounting method

Assignment 10

Scene 2 (9s)

Fixed assets Topic: ASSET DISPOSAL

ACCOUNTING GRADE 11

Scene 3 (22s)

For my video I chose fixed assets

I will use social media like Facebook to reach out to the leaners as they will be able to leave comments after the lesson for questions and for explanations I will post the video on Facebook and create a Facebook page to interact with the leaners F acebook page : www.facebook.com/learnaccounting

I will use social media like Facebook to reach out to the leaners as they will be able to leave comments after the lesson for questions and for explanations I will post the video on Facebook and create a Facebook page to interact with the leaners F acebook page : www.facebook.com/learnaccounting

Scene 4 (1m 15s)

What is ASSET DISPOSAL

What is an ASSET? Assets are resources controlled by an entity as the results of past events and future economic benefits will be derived It is de-recognition or a removal of a long-term asset from a business financial records In simple words its when a business sell its assets ,it could be a computer or vehicle or furniture like office desk

Scene 5 (2m 8s)

Why business dispose its assets

The existing equipment has become old Vehicles may have been involved in accidents Damage to assets and therefore the business cannot use it anymore Asset is out-of-date When can it be sold At the beginning of the year During the year At the end of the year (draw a timeline of 12 months )

Scene 6 (3m 52s)

How does a business dispose its asset?

Sell for cash–Bank Sell on credit–Debtors control Owner can take the asset for personal use–Drawings Asset can be given as a donation–Donations Vehicle can be traded in for a new one –Creditors control Asset can be damaged and an insurance claim can be lodged . The asset can be scrapped.

Scene 7 (5m 32s)

Steps to follow

Steps Transaction Account Dr Account Cr Cost price Transfer the cost price of the asset Asset disposal Asset account Depreciation Calculate the current depreciation(If applicable) Depreciation Asset disposal Acc depreciation Calculate the total accumulated depreciation at date of disposal(balance beginning of the year + depreciation up to date of sale as calculated in number step 2). Accumulated depreciation Asset disposal Selling price Sell for cash Sell on credit Taken by owner donated Bank Debtors control Drawings donations Asset disposal Asset disposal Asset disposal Asset disposal Calculation of profit or loss Transfer profit\loss Transfer profit Transfer loss Asset disposal Loss on sale Profit on sale Asset disposal

Scene 8 (5m 42s)

example

INFORMATION On 1 March 2020 (beginning of financial year) G rade 11c Traders sold a computer to B.Bafanas for R200 cash The original price of the computer was R300 and the accumulated depreciation amounted to R100 . REQUIRED Record the disposal of the asset as follows: Journalize the transactions Post to the General Ledger

Scene 9 (5m 52s)

General journal

debit credit Acc depreciation 100 Asset disposal 100 Asset disposal 300 Equipment 300

Scene 10 (5m 54s)

Solutions

STEPS 2 depreciation- R 0 ( no depreciation calculated when sold at the beginning of year) 3 transfer acc dep R100 1 transfer cost R300 4 sell cash R200 5 profit/loss Cost R300 less acc . dep . (R100) book value R200 sold for(R200)profit/loss R 0

Scene 11 (5m 57s)

EQUIPMENT 3 600 Mar 1 Asset di Mar Mar Mar Mar I Balance Asset di Asset dis Equipment b/d ACCUMULATED DEPRECIATION ON EQUIPMENT 100 MAR 1 Balance BANK sal 200 ASSET DISPOSAL 300 300 Mar I Accumulated depreciation on ui ment Bank 300 800 100 200 300 Both totals must be the same

Scene 12 (6m 0s)

Activity –self practice

Information On 1 March 2020 grade 11c sold an old vehicle on credit to XYZ for R18 000 . The cost price was R36 000 and was purchased on 1 March 2007. Depreciation is calculated at 20% per annum on the diminishing balance method. Accumulated depreciation was R17 568 on 28 February 2020. REQUIRED Record the disposal of the asset as follows: Journalize the transactions Post to the General Ledger