I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

received (unless this cannot be measured reliably) (para. 24).  

Taking the example above assume that, instead of the machine being sold for $19,000, it was 

exchanged for a new machine costing $60,000, a credit of $19,000 being received upon exchange.  

In other words, $19,000 is the trade-in price of the old machine. Now what are the relevant ledger 

account entries? 

Solution

 

PLANT AND MACHINERY ACCOUNT 

 

 $      

 

 $      

Balance b/d 

 110,000 

Plant disposal 

 30,000 

Cash $(60,000 – 19,000) 

 41,000 

Balance c/d 

 140,000 

Plant disposals 

   19,000 

 

               

 

 170,000 

 

 170,000 

Balance b/d 

 140,000 

 

 

The new asset is recorded in the non-current asset account at cost $(41,000 + 19,000) = $60,000. 

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CHAPTER 8  

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  TANGIBLE NON-CURRENT ASSETS