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How to Pass Entry on Profit of Sale of Fixed Assets in TallyERP.9?

Entry of Sale of Fixed Assets in TallyERP.9

Today we learn about calculation of Profit / Loss on Sale of Fixed Assets. We have some request in our Tally Knowledge whats app group about "How to Pass Entry on Profit of Sale of Fixed Assets in Tally".

To calculate the gain or loss on the sale of an asset, you compare the amount of cash received for the asset to the assets'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 expenses upto the date of the sale of asset.

For Example:

Vijay Purchase Car on 15/4/2013 for Rs. 5,00,000/- and Sold the same car on 26/08/2018 for Rs. 400000/-. In this case, we calculate depreciation on car till last year in which car is sold e.g. is car sold in FY 2018-19 then we calculate Depreciation till FY 2017-18 or calculate till date.

If total sale amount is more then WDV then it is profit or if Total sale amount is less then WDV then it is loss.

But 1st we need to calculate depreciation for last financial year in which assets will be sale, like Car sale on 26/08/2018 this means depreciation will be calculated till FY 2017-18. Enter depreciation entry like below image: 

In Above Entry, Depreciation will reduce your asset cost, and balance amount of asset is your WDV (written down value) for next year. In the same manner you need to calculate depreciation of all preceding years:

In this illustration, Total Cost of Car is Rs. 500000 less depreciation Rs. 278147/- Net value of asset is Rs. 221853.

Now car is sold for Rs. 400000/- Less WDV 221853/- = Rs. 178147 is gain.

Then entry will be as follows:

That all!!!!!!!!


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  2. Hey what a brilliant post I have come across and believe me I have been searching out for this similar kind of post for past a week and hardly came across this. Thank you very much and will look for more postings from you. ywam

  3. I think this is wrong, because if the sale takes place in March 2018 ,your answer is correct but sale is on August 2018 so you have to calculate for the rest of 5 months

    the period 2013 April to March 2018


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