Accounting of repair cost of damaged inventory
This query is : Open
31 August 2011
Dear friends,
Need your help in the below case:
1. Machinery sold to customer.
2. Servicing of machine done by us.
3. Damaged parts removed from machinery and sent to vendor for repairs.
4. Repaired parts received by us.
Please explain the flow of entries...
Need your help in the below case:
1. Machinery sold to customer.
2. Servicing of machine done by us.
3. Damaged parts removed from machinery and sent to vendor for repairs.
4. Repaired parts received by us.
Please explain the flow of entries...
31 August 2011
Repaired parts received can be valued as net realisable value of the parts
31 August 2011
We pass the following entry:
R&M a/c dr.
to vendor a/c.
is this correct
R&M a/c dr.
to vendor a/c.
is this correct
31 August 2011
yes. since you are taking maintenance so you can debit R&M and credit vendor a/c
02 September 2011
R&M account can be debited for expenses done on company owned assets only, so how can the above entry be correct,since the damaged machinery parts removed from machine owned by customer is a part of customer asset.
02 September 2011
for what provision you are doing r&m expenses for customer?
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