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Shell P

Faulty Workmanship

Posted By

Hi, 

I am trying to account for a vehicle we had to purchase from a customer due to faulty workmanship, the vehicle ended up being scrapped.

Any ideas how to do this please?

Many Thanks

  • 0

    Not a qualified accountant  so this has limited utility (in other words, don't listen to me), but my suggestion:

    Purchase value

    CR Bank DR Motor vehicles

    Scrap value (provided the scrap value was 100% cash)

    DR Bank CR Motor vehicles

    Purchase value - Scrap value (i.e. your loss)

    DR Not sure, looking through my charts I see capital gains, if you DR this account that shows that you made a loss on the sale of the asset?

    CR Motor vehicles

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