In R12 Assets can be created in two ways i.e Mass Additions and Manual Addition.

In
Manual Addition we can add asset through Addition and Quick Addition. Here i am
discussing about the Accounting entries generated out of Manual addition
(Addition), After performing Depreciated as well as after Retiring.

Here i am taking an example that i created an Asset worth Rs.1200, Life of Asset is
1 Year and Date Place in Service is 01 April 2013.

1st Entry created out of Addition is

Asset Cost A/c Dr       Rs.1200/-

   To Asset Clearing A/c                Rs.1200/-

Note: Here Asset Cost Account and Asset Clearing Account (Natural Account
Segment Value) is picked from Asset Categories assigned to the asset.

Note: Asset Clearing A/c Balance has to be knocked off Manually by passing Manual
Adjustment Entry as it is an control account.

2nd Entry generated out of Depreciation

Depreciation Expense A/c Dr  Rs.100

   To Accumulated Depreciation A/c     Rs.100

Note: Here Depreciation Account and Accumulated Depreciation Account (Natural

Account Segment Value) is picked from Asset Categories assigned to the Asset.

Here i am Retiring the Asset on 01st May 2013. After Retiring the Asset Accounting
entries generated are

3rd Entry generated out of Retirement

Net Book Value Retired (Gain or Loss) A/c Dr 1100/-

Accumulated Depreciation A/c DR 100/-
     To Asset Cost A/c   1200/-

Note: Here Net Book Value Retired Account (Gain or Loss) is picked from Book
Controls and Accumulated Depreciation Account, Asset Cost Account (Natural
Account Segment Value) is picked from Asset Categories assigned to the Asset.

Note: Here i am retiring the Asset for Total Cost and Proceeds of Sale, Cost of
Removal are Nill.

Final Conclusion if Asset is Live

1. Asset Cost is shown in Balance Sheet (FSG Report) on Asset Side

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2. Accumulated Depreciation is shown on Liability Side or Asset Side (-ve Amount) in
Balance Sheet (FSG Report).
3. Depreciation is shown on Debit side of P&L Statement (FSG Report) as it is an
expenditure.
4. Asset Clearing Account Balance is knocked off by passing manual entry.

 Final Conclusion if Asset is Retired

1. Upon Retiring, Asset Cost of the Asset gets Knocked off and Asset cost get
reduced to the extend of Asset retired.
2. Accumulated Depreciation gets knocked off and Accumulated Depreciation get
reduced to the extend of Retired Asset Accumulated Depreciation.
3. Depreciation is shown on Debit side of P&L Statement (FSG Report) as it is an
expenditure.
4. Asset Clearing Account Balance is knocked off by passing manual entry.
5. Net Book Value Retired Amount is shown on the Debit side if it is loss or shown on
Credit side if it is profit in P&L Statement (FSG Report).

4th Entry generated out of Retirement where Proceeds of Sale is

Rs.1,00,000/- (Loss)

Net Book Value Retired (Loss) A/c Dr 491,666.67

Accumulated Depreciation A/c Dr             8,333.33
Proceeds of sale Clearing A/c Dr              1,00,000
       To Asset Cost A/c                                              500,000

        To Proceeds of Sale (Loss) A/c                         1,00,000 

Note: Here Net Book Value Retired Account (Loss), Proceeds of sale Clearing ,
Proceeds of sale (Loss) is picked from Book Controls and Accumulated Depreciation
Account, Asset Cost Account (Natural Account Segment Value) is picked from Asset
Categories assigned to the Asset.

Final Accounting Effect

1.Upon Retiring, Asset Cost of the Asset gets Knocked off and Asset cost get
reduced to the extend of Asset retired.
2. Accumulated Depreciation gets knocked off and Accumulated Depreciation get
reduced to the extend of Retired Asset Accumulated Depreciation.
3. Net Book Value Retired (Loss) Amount is shown on the Debit side of P&L
Statement (FSG Report).
4. Proceeds of Sale Clearing Account gets knocks off on booking of AR Transaction
where Proceeds of Sale Clearing Account is entered in Revenue Account. We book
AR Transaction for Sale proceeds to capture sale proceeds in the system.
5. Proceeds of Sale (Loss) Account is shown on the Credit Side of P&L Statement
(FSG Report)

Entry generated out of Retirement where Proceeds of Sale is Rs.6,00,000/-

(Gain)

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Net Book Value Retired (Gain) A/c Dr 491,666.67
Accumulated Depreciation A/c Dr             8,333.33
Proceeds of sale Clearing A/c Dr              6,00,000
       To Asset Cost A/c                                   500,000

        To Proceeds of Sale (Loss) A/c             6,00,000 

Note: Here Net Book Value Retired Account (Gain), Proceeds of sale Clearing ,
Proceeds of sale (Gain) is picked from Book Controls and Accumulated Depreciation
Account, Asset Cost Account (Natural Account Segment Value) is picked from Asset
Categories assigned to the Asset.

Entry Generated out of AR Transaction for Sale Proceeds

Receivable A/c DR  XXXXX

     To Revenue A/c        XXXXX

Note: Proceeds of Sale Clearing to be taken in Revenue Account

Entry Generated when Receipt is applied to Transaction.

Remitted Cash A/c DR  XXXXX

   To Receivables A/c          XXXXX

Entry Generated when Receipt is Cleared.  

Cash A/c Dr   XXXXX

     To Remitted Cash A/c XXXXX

Final Accounting Effect

1. Upon Retiring, Asset Cost of the Asset gets Knocked off and Asset cost get
reduced to the extend of Asset retired.
2. Accumulated Depreciation gets knocked off and Accumulated Depreciation get
reduced to the extend of Retired Asset Accumulated Depreciation.
3. Net Book Value Retired (Gain) Amount is shown on the Debit side of P&L
Statement (FSG Report).
4. Proceeds of Sale Clearing Account gets knocks off on booking of AR Transaction
where Proceeds of Sale Clearing Account is entered in Revenue Account. We book
AR Transaction for Sale proceeds to capture sale proceeds in the system.
5. Proceeds of Sale (Gain) Account is shown on the Debit Side of P&L Statement
(FSG Report)
6. Revenue account (Proceeds of Sale Clearing) Gets knocked off
7. Receivable Account gets knocks off when Receipt is applied against the
Transaction
8. Remitted Cash Account gets knocked off once receipt gets cleared.
9. Cash Account is shown in Balance Sheet (FSG Report) on Asset Side.

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O TO C
Pic Release
Sub INV A/C
To Sub Inventory Acc (Staging)
Ship Confirm
COGS A/C
To Sub Inventory Acc

Invoice:
Receivables
To Revenue
TAX
Fright

Credit Memo:
Revenue
TAX
Fright
To Receivables(Credit Memo)

Apply CR-MO
Receivables (Credit Memo)
To Receivables (Invoice)

Receipts:
DR Cash
TO Receivables (Invoice)

Unapplied receipt:
Cash
To Un-Applied Cash

Receipt fully Applied:

Cash
To Un-Applied cash
Un-Applied Cash
To Receivables

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Unidentified receipt:
Cash
To Unidentified

On Account receipt
Cash
To Un-Applied
Un-applied
To on-account

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