Disposal of vehicle

[krimpie]

Assistance will be highly appreciated. (bundling them all)
Sale of vehicle of vehicle entries on pastel

Question 1 - Disposal of a vehicle
Vehicle settled by company directly
Settlement value is 75k
sold value is 70k
DT Installment Sale account with 75k (contra Cash book)
CT Installment sale account with 70k (contra cash book)
take balance to pft/loss of non current asset?
What do I do with motor vehicles at cost and depreciation to take it out.

Question2
What is the difference if the 70k is paid directly to the bank ?

Question3
Second question is with regards to disposing of other assets like office equipment? What entries will be used there for instance if a computer was bought for R3000 last year and getting sold for R 1000 this year? no depreciation was done

Question 4
with vehicles and equipment - these are all second hand goods and therefore no vat is invoiced or collected?

Thanks in advance

[CLIVE-TRIANGLE]

Entries for all non-current asset disposals (ignoring VAT issues):

Debit: Disposal Account (Income Statement) with original cost
Credit: Non-current asset cost (Balance Sheet) with original cost
Debit: Accumulated Depreciation with balance at disposal date
Credit: Disposal Account with accumulated depreciation balance
Credit: Disposal Account with total proceed
Debit: Related finance liability account with settlement, if settlement is less than proceed
Debit: New finance liability account with excess proceed if any

If finance debt is not involved, then the debit is in the bank

[krimpie]

Thank you Clive

[Beancounter]

Question 4
with vehicles and equipment - these are all second hand goods and therefore no vat is invoiced or collected?

If you are VAT registered, VAT may be claimed when purchasing second-hand goods from a non VAT vendor. Have the seller complete and sign a VAT264. This is your supporting document to claim VAT where you would have used a VAT Invoice if the seller was VAT registered.

Refer Section 20(8) of the VAT Act.

[krimpie]

Thanks Beancounter