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Capitalisation

Gireesh.kallerikkarammal (Accountant) (36 Points)

29 March 2014

I bought one new printer for office use and passesd payment entry of,

Printing & stationery a/c Dr

To Cash.A/c.

what would be the capitalisation entry. is there any depreciation to be charged.

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16 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 29 March 2014

Dear sir,

You made a wrong entry, you should make following entry:

Computer & Printer A/c Dr.

To bank / Cash Cr.

Depriciation will be 60%.

Regards

Abdul Hafeez (Accountant) (30 Points)
Replied 29 March 2014

Originally posted by : Manoj Mehta
	Dear sir, You made a wrong entry, you should make following entry: Computer & Printer A/c Dr. To bank / Cash Cr. Depriciation will be 60%. Regards

Hi,

They bought asset just now then why 60% depriciation need to charged.

Please answer.

CA Raj Doshi (Practising CA) (8733 Points)
Replied 30 March 2014

Computer a/c Dr Creditor a/c Car Creditor Dr Cash bank Cr Depr @ 60%for full year

Binod Padhi (Auditor) (52 Points)
Replied 30 March 2014

Printer is an asset and printing and stationary is an expense head. You can capitalize printer as asset in the category of computer peripherals and charge 60% dep on that . Entry can be Printer To Cash/bank/creditor

sitarama charyulu (manager finance) (27 Points)
Replied 30 March 2014

He has not confirmed date of purchase. So we can not give depreciation if it is current day purchase, else can apply. Printer a/c dr To cash&bank a/c dr will be the entry.

karthi (Cost controller ) (36 Points)
Replied 30 March 2014

Hi professionals,

With out GRN made (GOODS Receipt Note) we wont capitalsed any

Supposed not GRN made means

we have put in CWIP A/c Dr

Vendor Cr

While we pay(if give any advance means)

Vendor Dr

Bank Cr

After Installed the Computer or Fax Printer

Computer/Printer Hardware _FA DR

C Wip Cr

For Depreciate the particular assets

Depreciate dr (As per Company Act)

Computer/Printer Hardware _FA cr

With regards

D.karthik

manik jain (articled assistant) (28 Points)
Replied 30 March 2014

Kindly tell why asset can't be capitalised if GRN is not made?Where it is mentioned

CA Soman Jana (C. A & C.S (Final)) (97 Points)
Replied 30 March 2014

Grn is not the criteria for capitalisation at all. Goods purchased under valid tax invoice and put to use is the case then eligible for income tax dep for 60% if purchase before 30 sep or 30% as the case may be.making grn is the good practise but not the basic criteria for eligibility. Refer dep as per income tax . ThNks

Keshav Dutt Beetan (Deputy Manager) (32 Points)
Replied 30 March 2014

Dear Karthik,

GRN entry is required only if you involve stores in it, otherwise you can directly capitalize the same, Its not mendatory to route through the process you are telling about.