good costing Rs 5000 wassold for Rs 6000(journal entries)
Answers
Answer:
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Explanation:
What will be the journal entry for a machinery worth Rs. 5,000 that is sold for Rs. 3,000?
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Exactly @ .. i perfectly agree with
Just that, i wish to add a point to enhance his answer furthermore..
That loss on machinery is not due to the operational inefficiency of the business. Hence we create a ‘Capital Reserve A/c ‘ to adjust all our Non-operating profits and losses and then take the net non-operating profit and loss a/c to our Profit & Loss A/c.
But we shall also debit Profit and Loss A/c directly to account that Loss on sale of Machinery.
Hence, my answer would be..
Cash a/c dr. 3000
Capital Reserve a/c dr. 2000
To Machinery A/c 5000
(Or)
Cash a/c dr. 3000
Profit and Loss a/c dr. 2000
To Machinery A/c 5000