Ledger Question:
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Tell me how to record retained earnings when you sold company (assets only), for closing of books that sold?
Answer:
When company dispose there assets the following transaction takes place
Assets = Liabilities + Shareholders Equity
Suppose assets beginning balanceis $4900and accumulated depreciation is $1900
When you want sell, both of these should beeliminated from account book so asstes $4900 and accumulated depreciation debited by $1900,so both assetswill be clear.
Let us come for retained earnings,
This depends on profit or loss.
When it is disposedit depends uponassets sold more than or less than book value.
If more than book value is retained earnings is credited, if less than book value is retained then earningsis debited
Assets = Liabilities + Shareholders Equity
Suppose assets beginning balanceis $4900and accumulated depreciation is $1900
When you want sell, both of these should beeliminated from account book so asstes $4900 and accumulated depreciation debited by $1900,so both assetswill be clear.
Let us come for retained earnings,
This depends on profit or loss.
When it is disposedit depends uponassets sold more than or less than book value.
If more than book value is retained earnings is credited, if less than book value is retained then earningsis debited
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