Accounting treatment

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Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2011 We purchased Assets Rs. 50 L (Tax Invoice Rs. 50L), however we made full & final pay. of Rs. 49L (accepted by vendor). what will be correct a/c treatment :-
1) Book asset at Rs. 49L
2) Book asset at Rs. 50 L & Show Rs. 1 L as dis.
In second case we have to show Rs. 1L as income & will also be liable for tax
Pls provide suggestion in the matter

Thanks in advance :

Amit

CA Navin Jain

CA Navin Jain (Expert)
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14 November 2011 book the assets of Rs. 50L and then issue debit note of Rs. 1l to vendor

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chandan

chandan (Expert)
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14 November 2011 If you have already booked the FA at 50 lakhs, then possibly you need to calculate deprecation on the same amount.

Now that in vendor payables account instead of 50 lakhs only 49 lakhs have to paid, the blance can be transferred to PL account as provision written back and offer the same to tax.

Regards
Chandan

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CA Navin Jain

CA Navin Jain (Expert)
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14 November 2011 issue to debit note to vendor and credit to fixed assets of Rs. 1L

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