Accounting query tally erp 9

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This query is : Resolved

pranav (Querist)

27 January 2015 Purchase machinery costing Rs40,000 on credit from X ltd and paid Rs1000 as transport charges and Rs500 as erection charges.
Query:Whether below understanding is correct?
Machinery A/c Dr 40000
To X ltd A/c 40,000
(Journal voucher F7)

Transport Charges A/c 1000
Erection charges A/c 500
To Cash A/c 1500
(Payment Voucher F5)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

27 January 2015 you can use the Journal voucher and can pass this entry (f-7)

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pranav

pranav (Querist)

27 January 2015 Whether below understanding is correct?
Machinery A/c Dr 40000
To X ltd A/c 40,000
(Journal voucher F7)

Transport Charges A/c 1000
Erection charges A/c 500
To Cash A/c 1500
(Payment Voucher F5)

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

28 January 2015 As per AS- 10 , we need to capitalise the expenses incured till the asset bring to location and make running. So your transportation charges and erection related to machinery need to capitalise.,so,use F-7

pass the jv capitalising the Rs.41500 ( 40000/1000/500) debit machinery and credit X ltd accordingly Rs.40000 and balance credit as expense payable or some other payable ledger and make payment entry accordingly

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