I have a doubt in accounting. please help me as soon as possible
james (Student CA CPT ) (31 Points)
03 March 2016james (Student CA CPT ) (31 Points)
03 March 2016
Saliq Ansari
(CA_Final Student)
(885 Points)
Replied 03 March 2016
Plz provide some more details as to,
james
(Student CA CPT )
(31 Points)
Replied 03 March 2016
sir,
thanku so much for such a fast reply...
i dont have details..
sir, one of my friend asked me this question. i dnont know the answer. so i asked in this forum..
james
(Student CA CPT )
(31 Points)
Replied 03 March 2016
sir,
can u please answer the question...in many possibilities...
Saliq Ansari
(CA_Final Student)
(885 Points)
Replied 03 March 2016
Assume that the asset purchased on 01st October for Rs. 1,00,000/- payment made through bank and errorenous entry passed on payment as Debtors A/c Dr to Bank.
On the year end Debtors Balance in Balance Sheet is Rs. 1,00,000/- instead it should be Fixed Asset less depreciation (suppose the Depreciation Rate as 10% SLM). So our Asset in Books should be Rs. 95000 and Depreciation Rs. 5000.
On 30th Sept of next year
The Should be value in books for Asset Rs. 90000 And Accumulated Depr Rs. 10000,
We Return our asset to the Seller, But first we have to rectify in our books as follows
Assets A/c Dr. 90000
Depreciation A/c Dr. 5000(C.Y. Statement of P&L)
Depreciation A/c Dr. 5000 (Prior Period Item as per A.S.5)
To Debtors 100000
Now while returning the Assets take the amount to be received from seller as selling price and calculate gain or loss on asset
Selling price of Asset - Value of Asset in books.
james
(Student CA CPT )
(31 Points)
Replied 03 March 2016
sir..
thank u so much for such a simple explanation...
but.. sir, assume we have not entered anything in the books of accounts at the time of purchase of fixed asset...i have not recorded the asset & i have not debited any receivable, then what will be the entries...?? can i give debit note when returning?? if yes, then how??
Saliq Ansari
(CA_Final Student)
(885 Points)
Replied 03 March 2016
The Company didn't recorded asset or receivable but, the company would have passed entries from bank Statement there would be an entry for payment of purchase of asset, we would have to know what treatment the company did for that payment and accordingly we could suggest a rectification entry.
It could be possible that the company had purchased the asset in cash ( if amount of asset is below 20000) and didn't give effect of purchase of asset or of cash.
In both situation first company would have to book asset in the Accounts of Company by passing rectification entry and then after could issue a debit note corresponding to the credit note send by the supplier.
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