Hello Friends,
Case no 2 was done in last class but we didn't run it
Case no 2 is still flashing
I am going to change this to Case no 3
Let's go
How to make Case no 3?
I told you this example, this question we will do with you
first after making a machinery account only when provision
is not there and this time we will do only when provision
is there and asset disposal account is also made asset
disposal account is also made then how will it work so just
like in this question and asset disposal account also
prepared word is added then this will become Case no 3
I will leave the screen like this for 10 seconds and
request you to write 3rd time don't hesitate to write if
you have to write 3rd time then no problem write 3rd time
write fast 10 9 8 7 6 5 4 3 2 1 my dear friends write 3rd
time do you know the benefit of this? the benefit of this
is entry will go to your DNA entry will go to your DNA yes
and I believe that evergreen ever important topic if we are
spending 7-8 hours from base to conceptual discussion to
understanding journal entries to
accounts if you see journal to balance sheet then this is
not an investment in a way if you see depreciation is very
important ok sir we believe you we will write this again
very very good this photo will be like this yes sir
solution Case no 3 when I am also writing then what is your
problem if you are so careless that you have problem in
writing then you don't want to learn 1st January 23 1st day
we will buy machinery no.1
I know you know this machinery account debit no.1 to bank
account being machinery purchased 1st machine bought for 6
lakhs you are not writing narration because we don't have
logic to write narration ok sir 6 months passed
January, February, March, April, May, June and in July we
bought machinery no.2 write the same entry again machinery
account debit to bank account write no.2 this time purchase
is 2 lakhs 2 lakhs this time purchase is 2 lakhs ok sir
there is no change in entry you buy machinery in provision
case in asset disposal case in normal case always always
always machinery account debit bank account as simple as
that ok sir now what will happen 31st December 31st
December 1st year when depreciation will
applied
then entry will be depreciation account debit to provision
for depreciation account sir because it is PD you are
asking reason we are making provision for depreciation then
why we are making to create depreciation we are making in
provision account depreciation account debit to provision
for depreciation and all dear children know all smart
children know 60,000 and 10,000 depreciation will be 70,000
all dear children know 6 lakhs 10% 2 lakhs 10% 70,000
60,000 on machinery no.1
plus 10,000 on machinery no.2 10,000 on machinery no.2 and
now
I don't need to say so much swearing in mind that P&L
account debit to depreciation account it comes out of our
mouth with 7 70,000 sir these entries are same no role of
asset disposal entries are same where is the role of asset
disposal for your information friends role of asset
disposal will come when asset is disposed its name is asset
disposal disposal means sale when sale happens then it is
active why we make asset disposal we make asset disposal
because whatever machinery part we have
its sale value book value till date depreciation profit and
loss on sale to keep it in one place we make asset disposal
account it will be activated on sale we need it only then
when sale happens we make it to maintain record ok so asset
disposal will not be alive till sale discussion does not
come yes sir enter next year entered next year sir entered
next year sir on 1st july 2024 buy 3rd machine buy
machinery account debit no.
3 to bank account how much you bought 3rd machinery 4 lakh
rupees 4 lakh rupees machinery account debit to bank
account machinery no.
3 4 lakh this is it now what we have to do now you just
have to keep going on 1st july sale will happen on 1st july
here will be explosion on 1st july sale is happening which
machinery 1st machinery sale my dear friends 1st machinery
sale so you can see you can see friends till here all story
is same machinery to bank which we did 2nd case provision
which was not only asset disposal till here all story is
same 1st entry machinery to bank 6 lakh 6 lakh 2nd entry
machinery to bank 2 lakh 2 lakh
to provision 70 70
P&L to deposition 70 70 machinery to bank 4 lakh 4 lakh
till buying 3 machinery all discussion is same but as soon
as on 1st july 2024 sale will happen in 3rd case when we
did 2nd case what we did at sale from 1st july to date of
sale depreciation from 1st july to date of sale
depreciation depreciation account to provision for
depreciation 27000 transfer to P&L
P&L account to depreciation let's do this much work do this
much work quickly depreciation P&L account debit to
provision for depreciation account
machinery number 1 27000 27000 and P&L account debit to
depreciation account 27000 27000 depreciation to provision
for depreciation
P&L to depreciation 27000 now what will happen now this
provision will take change it will not take change directly
provision for deposition account debit to machinery
provision will not hit machinery to hit provision we have
to go there bank to machinery entry will be same but it
will be split into 2 provision for deposition account debit
to machinery first asset disposal account then provision
for deposition account first machinery will hide in asset
disposal
asset disposal account debit to machinery account
to machinery account what will be the value in this you
will send machinery number 1 in asset disposal account what
is the value of machinery number 1 you can see machinery 1
in first entry you have debited 6 lakhs after that
machinery 1 after that you have not done anything nothing
so whatever value is in your book take that value and name
it asset disposal account of machinery asset disposal
account machinery account machinery account machinery
account machinery account
Asset Disposal Account Debit to Machinery, so remember the
value here, which value comes here?
Cost Price of Machinery Sold
The cost price of the machinery you are selling on 1st
July, you bought it in 6 lakhs, that value comes here
Asset Disposal Account Debit to Machinery Account
Machinery went to the house of Asset Disposal and kept
looking at the provision
Machinery called Provision and said that you were trying to
take revenge on me, I am sitting in the house of Asset
Disposal
Provision said ok, if you have covered the bed of Asset
Disposal, then I will hit from the top
I will hit Asset Disposal
Provision for Depreciation Account Debit to Asset Disposal
Account
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Now we will do the Entry of Profit or Loss
We know that there was a loss on this
Entry of Loss
Loss on Sale of Machinery Account Debit to Machinery
Loss on Sale of Machinery Account Debit to Asset Disposal
Account
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Total Depreciation on Machinery Sold from Date of Purchase
till Date of Sale
Let's see now
What happened to Asset Disposal Account
Let's see what happened to Asset Disposal Account
Asset Disposal Account Debit was 6 Lakh Rupees
Yes Sir
And what was the Credit? 87 87 Plus 386 386 Plus 127 Means
Credit was also 6 Lakhs
Asset Disposal Account has no balance
Asset Disposal Account is always closed
Remember Asset Disposal Account has no balance
Asset Disposal Account will get closed
You will put the value of Machinery in it 6 Lakhs
Provision will come and hit it
Some value will be reduced
You will sell in some value
And you will record the Profit and Loss
So there will be no balance
Balance difference comes from Profit and Loss
You will put Profit and Loss in Asset Disposal Account
Loss is written as Loss on Sale of Machinery
Asset Disposal is written as Profit on Sale of Machinery
Asset Disposal Account Debit is written as Profit on Sale
of Machinery
So there will be no balance
There will be no balance in Asset Disposal Account
Sir, we understand this
We understand this
I said good
So all the work of 1st July 2024 gets over
Now you start the last day of the year
31st December 2024
What to do on this day?
Sir, now Provision has taken revenge from only one Machinery
It will save the other two from depreciation
So Depreciation Account Debit to Provision for Depreciation
Account
Rest two on Machinery 2nd and 3rd
Machinery No.
2 gets 19,000
And Machinery No.
3 gets 20,000
39,000
39,000 And PL Debit to Depreciation 39,000 39,000 39,000
39,000 39,000 Write it down
Write it down very well
We will make their accounts
Write it down
Let's prepare the accounts
If anything is left on this page, then write it here
If anything is left here, then pause it and write it here
And if some great people have not written in the beginning,
then pause it and write it here
Okay? Okay, sir
Let's get the Machinery Account quickly
Ta-da Ta-da Ta-da Ta-da Ta-da Ta-da Ta-da Ta-da Ta-da Ta-da
Ta-da
You saw the Machinery Account treatment three times
And you see different screens three times
Yes, this is the game
It's the game
First of all, on 1st January, 2023, you will buy the first
machine, to bank account.
Number one.
What is its amount? 6 lakh rupees.
Very good.
Thereafter, 6 months later, on 1st July, 2023, you will buy
the second machine, to bank account.
Number two. 2 lakh rupees.
Yes, sir. Right? Right.
Thereafter, thereafter, thereafter, depreciation will come
in the machine account.
It will not come, it will not come, it will not come, it
will not come, it will not come, it will not come.
So what will happen? This year will close just like that.
On 31st December, 2023, close this year.
Buy balance CD.
Look here, just like this, in the second case.
Exactly like this.
It is visible, it is visible, it is visible.
Here it is.
Like this.
Buy balance CD.
The amount will remain the same in the second case, until
the asset disposal is done.
The first machine, 6 lakh rupees.
The second machine, 2 lakh rupees.
Total, 8 lakh rupees.
And the total of both the sides is also 8 lakh rupees.
8 lakh rupees.
Now make the closing balance as the opening balance.
1st January, 2024, to balance BD.
6 lakh rupees.
2 lakh rupees.
Total is 8 lakh rupees.
The total is 8 lakh rupees.
Now what will happen?
Now, now, now.
By looking at the timeline of your question, let's see what
is happening.
Now buy the third machine on 1st July.
1st July, 2024.
To bank account, machinery No. 3.
And on 1st July 2024, this machine worth 6 lakhs was handed
over to Asset Disposal.
By Asset Disposal.
By Asset Disposal Account.
6 lakhs.
When we were doing the second case, what happened in the
second case?
In the second case, the entire account of the machinery you
sold was here.
From the first day of the year to the date of sale,
adaption was 87.
You sold it for 386. Loss was of 127.
It has a total of 6 Lakh accounts 386 plus 1 is 27 plus 87
But this time we have taken this 6 Lakh and put it in the
asset disposal account and the break up of this 6 Lakh will
be written in the asset disposal account and we will go
separately
We will provide the break up there, that's the difference
between the 2nd and 3rd case
Ok Sir, Ok
And the balance that we will have on 35th December 24th in
the machinery account will be of 2 Lakh and 3 Lakh
Buy Balance CD, Machinery 2 and 3 2 Lakh and 4 Lakh 2 Lakh
and 4 Lakh
As it was left here, 6 Lakh, exactly the same
Total of both sides 12 Lakh and 12 Lakh
So do a little comparison that what is the difference
between the 2nd and 3rd case in the machinery account
The break up of that 6 Lakh here we say, go to the asset
disposal account and see, you will get there
Ok Sir, Ok
Let's move ahead, next question
Sorry, Provision for depreciation
Let's make the next account
Provision for depreciation account
Debit Credit Date Particular Amount Date
Particular Amount Date Particular Amount
Write it
When did we apply depreciation for the 1st time?
On 31st December 2023
By depreciation
Depreciation Depreciation
On machinery number one, 60,000
On machinery number two, 10,000
Total 70,000
Closing balance, CD, 70000 70,000
60 on 1 and 10 on 2
Then 1st January 2014
Buy Balance BD
No.1 60,000
No.2 10,000 and total 70,000
Depreciation on 1st July 2014
Buy Depreciation on 1st July 2014
Depreciation on 1st July 2014
27,000 on 1st January
Depreciation on 1st January 27,000
Depreciation to provision for depreciation 27,000
Then On 1st July, provision will take a change
On 1st July, provision will say
On 1st machinery, 60 and 27
I have tolerated the depreciation of 87
I will not tolerate it
It will hit asset disposal
Because machinery is hidden in it
From how much amount? 87,000 87,000 Look here
Come to 2nd case
Provision for Depreciation Account
Changed from machinery to 87
Here machinery has given
Asset Disposal
It will take a change from asset disposal
It will hit asset disposal
Provision 87,000
Then On 31st December 2014
For remaining machinery
Provision will be there
For 2nd and 3rd 2nd 19,000 3rd 20,000
Total 39,000 19 and 20 39,000 Closing Balance 2nd Balance
CB
70, 27, 29
49,000 31st December 2014 2nd Balance
CB 49,000 136,000 136,000 Please write down 136,000 136,000
There is a slight difference
Here instead of machinery
Asset Disposal Account is visible
Now We will make another account
Asset Disposal Account
It takes birth on the day of sale
It closes on the same day
It is amazing
Date Particulars Amount Date Particulars Amount
Date, Particulars, Amount
In Asset Disposal 1st July 2014 2 Machinery Account
No. 1 6 Lakh 6 Lakh
Provision 87,000 By Provision for Depreciation
Provision 1st July 2014 General Entry
Asset Disposal
Debit 6 Lakh 6 Lakh
Provision for Depreciation
Debit 87,000 87,000 By Provision 386,000 By Provision
386,000 By Bank 1st July 2014 By Provision 127,000 By
Provision By Loss on Sale of Machinery 1st July 2014 6 Lakh
6 Lakh
By Provision By Provision By Provision By Provision By
Provision By Provision By Provision
By Provision
By came in asset disposal provision came and reduced its
value from 87 so asset disposal account is looking up that
6 lakhs of machinery came provision reduced its value from
87 and value was 5,13,000 then someone bought that
machinery in 386 so its loss was 127 on both sides 6 lakhs
6 lakhs of machinery came, what happened to that 6 lakhs
out of 6 lakhs 87 was killed someone bought it in 386 and
we recorded its loss of 127 that's it on 1st July account
opened on 1st July account closed so
disposal account ok and then depreciation account in
depreciation account first entry will come debtion account
debit to provision for depreciation 60,10,70 on 31st
December 2023 and same day you will transfer it 70,000 then
on 1st July 24 depreciation on 1st machinery 27,000
depreciation account debit to provision for depreciation
27,27 and same day you will transfer it to P&L and then on
31st December 24 to provision for depreciation 39,000
39,000 39,000 this is the same depreciation as it
in 2nd case it will be same in 3rd case asset disposal
account of machinery sale goes to another account on
depreciation account asset disposal account you can see
your entries see your entries
debtion to provision for depreciation
P&L to depreciation debtion to provision for depreciation
then depreciation debt to provision for depreciation
P&L to depreciation depreciation and asset disposal account
are not together you can see There is no direct relation
between them
And friends, as far as P&L account is concerned, it will be
same as in previous case, 2 depreciation is 70,000
After that, next year 2 depreciation is 27,000, loss of
127,000 and depreciation of 49,000 is remaining on machinery
But, but, but
This entry which we have done
Look carefully
Loss on sale of machinery account debit to asset disposal
account
What was this entry in 2nd case?
In 2nd case, this entry was
Loss on
Let me show you
Here it is
Loss on sale of machinery account debit to machinery account
This loss will always come in P&L
This loss on sale of machinery which you are debiting, we
transfer it to P&L
Don't think that machinery account was getting credited, so
we transferred it to P&L
When asset disposal account is opened to keep account, then
why we are transferring its loss to P&L
You had said that everything will be recorded in asset
disposal account
Loss will come here, then why we are taking it to P&L
Because friends, you are studying double entry system,
there is double effect
Ultimately, loss burden goes on shoulders of P&L
Ultimate account is P&L account, it has all types of income
and all types of loss
So that in the end, net profit and net loss of business can
be taken out
So, it will go there
So, your P&L account will also be same
Your P&L account will also be the same
So, today I am giving you a homework
P&L account and depreciation account, you have to make in
case no.
Let me revise the entry list once
Because after this topic will not be discussed conceptually
We will see this case only in Tally
Nothing else
Ok sir, tell me
First of all, entry to buy machinery, machinery account
debit to bank
Whether there is provision or not, whether there is asset
disposal or not, it doesn't matter
In second case, what will be the entry of depreciation, it
has nothing to do with asset disposal
It has to do with provision for deposition
If there is no provision for deposition, then depreciation
account debit to machinery account
And P&L account debit to depreciation
And if there is provision for depreciation
So, depreciation account debit to provision for
depreciation account
And then P&L account debit to depreciation account
Ok sir
Third case, what will be the entry in sale
Entry of sale depends on whether there is asset disposal or
provision for depreciation
First case, there is no both
Bank account debit to machinery
Second case, there was provision
Asset disposal is not given birth
So, provision will change, provision for deposition to
machinery
And bank account debit to machinery
Third case, there was no provision
Depreciation was hit and asset disposal will be made
So, asset disposal to machinery, bank to asset disposal
Provision will not come to take revenge
Just machinery will be transferred to asset disposal
Asset disposal to machinery and money will be obtained from
it
Bank account debit to asset disposal
Fourth case, P&D was also made
To save machinery from deposition
And AD is also being made
First of all, machinery will hide
Asset disposal to machinery
Provision will hit asset disposal
Provision for deposition to asset disposal
And bank account debit to asset disposal
Okay
If entry of sale is loss
It depends on whether there is asset disposal or not
If it isn't then, loss on sale of machinery to machinery
And if it is there, then?
Then, loss on sale of machinery account debit to asset
disposal instead of machinery
If profit will be on sale
Then also will dependses on, if asset disposal is there or
not
Then machinery account debit to profit on sale of machinery
If asset disposal is there and asset disposal account debit
to profit on sale of machinery we had taken 3 oaths we will
never forget P&L to depreciation entry in case of sale from
1st day to date of sale we will never forget to transfer it
to P&L we will never forget and third oath if it is case of
organization we will use SPL word instead of P&L statement
of profit or loss yes sir so this was conceptually all the
discussions my dear friends everything is over next case we
will see in next clip
revision as much as you can concept of depreciation
meaning, calculation, methods posting in telly learning to
do general entry how to make accounts how to post entries
in telly how to make ledger how to see their effect
everything has been covered my dear friends so I want to
say this keep on doing revision without revision there is
no benefit we will meet in next clip thank you bye bye take
care my dear friends