Avail 50% discount on All CS & CMA subjects for Dec batch . Use coupon code Dec14

×

Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


Discussion > Accounts > Others >

Accounts

    Post New Topic
Pages : 1 2





B.COM,MBA,CWA Inter


[ Scorecard : 401]
Posted On 29 August 2011 at 10:12 Report Abuse

Can anyone please tell me where is the posting of Machinery repair expense  whether  i have to put in Manufacturing exp in trading account or i need to take in profit & loss account & what is the logic behind that if i take Machinery repair expnese in trading account under Manufacturing expense.

waiting your reply....


Online classes for CA CS CMA



valji
Accounts manager-MBA


[ Scorecard : 2114]
Posted On 29 August 2011 at 10:21

manufacuring expeses haed under tarding accounts in profit & loss accounts before gross profit it is a direct expenses realated to production



Total thanks : 1 times




SANDEEP R. WAWHAL
B.Com, ,C.A. Final


[ Scorecard : 1434]
Posted On 29 August 2011 at 10:36

Machinery repair expenses should be come under Repairs & maintainance which will reflect under indirect expenses because repairs for machinery is expense towards maintanance of adequet working condition of machinery and also irregular, so it does not releted to production purpose directly and hence it is indirect nature.



Total thanks : 1 times



AMANJOT SINGH
ipcc+helping hands for friends to the best of my knowledge


[ Scorecard : 53]
Posted On 29 August 2011 at 11:59

sandeep is right it should be treated like this



Total thanks : 1 times



Karan Teli
Life Is just an Illusion...!!


[ Scorecard : 4434]
Posted On 29 August 2011 at 14:22

First check the purpose of machinery and see where is it utlised..

if it is used in manufacturin of goods then treat it as direct expenses and if it is used for packing purpose and all then treat it as indirect one..

If it is indirect you can include in the head of repairs and maintianence.. ( basically the head od acount is irrelevant)

the bases is for what purpose are they used and in what form are they integral to the machinery....



Total thanks : 1 times



TARUN GOYAL
Ca Final Student


[ Scorecard : 32]
Posted On 29 August 2011 at 15:51

karan is right........



Total thanks : 1 times



Amit Gupta
Loosening Myself


[ Scorecard : 1498]
Posted On 29 August 2011 at 16:55

Originally posted by : $ SANDEEP $

Machinery repair expenses should be come under Repairs & maintainance which will reflect under indirect expenses because repairs for machinery is expense towards maintanance of adequet working condition of machinery and also irregular, so it does not releted to production purpose directly and hence it is indirect nature.

Repairs can NEVER hav direct relation with the ouput.Thus being indirct it should be classified under Repair and maintainance(P/L)



Total thanks : 1 times



sangmesh
CA Final Year Student


[ Scorecard : 56]
Posted On 29 August 2011 at 17:38

All expenses inrelation to production should be treated as direct expenses i.e. manufacuring expenses.So  Repairs & Maintenance of Machinery is also a direct expense in relation to production, if it is not done it affectes the production or may be not possible to futher proceed for production.irrelevant of it is regualr or not, it will not affect the relationship between direct or indirect expense.

Further it is clarrified that if the repairs and maintence is major / huge which increases the production capacity of the machine then it should be capitalised instead of debiting to trading account.

It is further to be classified that ,if repairs and maintenance is related to cleaning ,pest control or washing etc then only it is treated as indirect and debit to P& L account.only

Hope u will get ur ans.

thanks


 



Total thanks : 1 times



Karan Teli
Life Is just an Illusion...!!


[ Scorecard : 4434]
Posted On 30 August 2011 at 11:17

chalo another explanation from cost accouting view...

Repairs to machinery are part of direct expenses since they are going to be linked to production...

 

they, thus form part of prime cost and hence when we compare it to accounts too it is direct exp.

( i know this is not part of accounts since this article is posted in accounts but it is just an attempt to be much clear since integration and non integration accounting is also a part of subject and act as link between costing and accounts)




U S Sharma
glidor@gmail.com


[ Scorecard : 19398]
Posted On 30 August 2011 at 12:29

Originally posted by : Parmod Rawat

Can anyone please tell me where is the posting of Machinery repair expense  whether  i have to put in Manufacturing exp in trading account or i need to take in profit & loss account & what is the logic behind that if i take Machinery repair expnese in trading account under Manufacturing expense.

waiting your reply....

if nature of machinery repaired is used for production line, then its direct expenses, but if the repair is done for office works machines/ airconditioner/ car , then its indirect expenditure

 



There are 10 Replies to this message






Related Files








Related Threads


Post your reply for Accounts



Your are not logged in . Please login to post replies

Click here to login


Not a member yet ?? Click here to signup

Message







    

  • Use thank button to convey your appreciation.
  • Maintain professionalism while posting and replying to topics.
  • Try to add value with your each post.



Forum Home | Forum Portal | Member Control Center | Who is Where | Popular Threads | Today's Topic | Recent Posts | Today's Posts | Post New Topic | Thread With Files | Top Threads This Month | Forum Stats | Unreplied Threads

back to the top