Accounting treatment

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

11 May 2012 Dear all,
Please solve the query-
A purchased a machine in Jan.2010 for Rs. 1100000/- for which he paid Rs. 1000000/- at the time of purchase and rest amount was to be paid after 180 days successfully running of machine. The machine could not run well even for 100 days and A had to spend huge amount on repairs in april 2010. He did not pay the seller the remaining amount of Rs. 100000/- for which the seller could agree only upto may 2011. The due amount was shown in balance sheets of 2009-10 and 2010-11 as payable.
Now,in 2011-12, A wants to delete that entry. What should be the proper treatment . Please suggest.
Thanks

Mihir Doshi

Mihir Doshi (Expert)
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11 May 2012 What entry did you pass for 100000/-

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 May 2012 The entry will be as under:

Creditor A/c Dr
To Plant & Machinery

Creditor's balance will be written off and the carrying amount of Plant & Machinery shall be reduced.

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