UK Accounting for property development company


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Can anybody help.

This is a property development company who does their own bookkeeping.

They have purchased the property which was sent to the asset account.

They have now sold the property at a profit and the funds are now in the bank account and they have sent this to sales.

Obviously the disposal needs to be recorded but how is the purchase price shown as a cost.
 
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Hmmm.......when the property was original purchased, it will be recorded as an Asset (Property, Plant and Equipment or Inventories, depending on the Business Model) on the Balance Sheet, and this Asset is recorded at the Cost of Purchase.

When the Asset is sold, you will de-recognize the Asset from the Balance Sheet accordingly.
 
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If this is a non-standard transaction for the company, then
  • Dr Cash
  • Cr Property (asset)
  • Cr Gain on Sale of Assets
 
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Truemanbrown

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Can I ask you the question - was the property purchased with the intention of holding it as an investment or was the intention to develop the property and sell it?
 

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