Managing accounting for real estate business

Zaheer Boovaji (Others) (37 Points)

10 October 2015  

Hi i am creating an Accounting and Taxation Software for Real Estate Business and need an information. I have read accounting for general businesses and need to accounting for Real Estate Business, the nature of the Real Estate Business will be Buying,Renting,Selling and Construction for making business for us and providing construction services to others

Now, I have an scenario for which i will be posing Questions

Suppose,

  1. On 01/01/2015 I have purchase an Land(a Layout) for 50,00,000(what purchase entry do i need to pass in the journal since my later plan is to develop the layout and to divide the layout into plots and sell some of the plots and rent some of the plots from that layout). Question > what entries do i need to pass in the journal,ledger and cash book
  2. On 01/02/2016 that is after 1 year and 1 month i am going to develop the layout with cost of 2,00,000 as follows: On 02/02/2016 I purchase Cement of Rs 50,0000, On 03/02/2016 I purchase sand of Rs 50,000, On 04/02/2016 I pay labor charges of 50,000, On 05/02/2016 I pay renting charges of 50,000 for JCB used for digging and leveling the land. In this way i develop my layout and divide that layout into plots say plot-1,plot-2,plot- 3,plot-4,plot-5. Question > what entries do i need to pass in the journal,ledger and cash book
  3. Now on 10/04/2017 that is after 1 year 2 months i will sell 'plot-1' directly say for 20,00,000 and my customer will pay me 10,00,000 on the same day and balance amount he promise to pay me on 10/05/2017 that is after one month and later my customer pays me the balance amount Question > So how do i need to record this in journal,ledger and cash book
  4. Next on 10/06/2017 i will sell plot-2 based on installment scheme where customer is going to pay me Rs. 5,00,000 as deposit amount on the same day and the rest he will be paying in 15 EMI's                                     Question > So what journal,ledger and cash book entries do i need to pass for this              
  5. Next on 10/07/2017 i will rent plot-3,plot-4 for some motor company they will pay me the deposit amount of 1,00,000 and rental every month will be 1,00,000 the rental agreement will be of 4 years. Question > How do i need to record this in journal,ledger and cash book
  6. Next on 10/08/2017 i will rent plot-5 to some xyz company where he has paid me Rs 2,00,000 as deposit and rental every month will be 50,000 the rental agreement will be of 4 years                                                            Question > How do i need to record this in journal,ledger and cash book
  7. Next after 4 Years after the rental agreement period gets over the plots which i had given for rental that is plot-3,plot-4,plot-5 i will sell them to 3 different customers namely x,y,and z for 40,00,000 lakhs                             Question > how do i need to record this in journal,ledger and cash book

Question : Please Explain me each step of transaction that needs to be written in the books of account i have an basic knowledge of Accounting for General Businesses and Manufacturing firms as i have read some of the books of Accounts, but i dont know how to manage the books of account for Real Estate Business since capital gain and income tax is involved 
I know how to calculate Capital Gains. so please explain me different level of taxes also in this how the taxes has to be deducted and how the books of account has to managed

 
Thanks in Advance