Depreciation under companies act 2013
This query is : Resolved
11 June 2015
RESPECTED SIR,
THE ORIGINAL COST OF PLANT AND MACHINERY IS RS.100.00 LAC RESIDUAL VALUE RS.5.00 LAC.AS PER SCHEDULE II OF COMPANIES ACT 2013 THE USEFUL LIFE OF ASSET HAS ALREADY EXPIRED IN F.Y.2013-14. W.D.V OF ASSET AS ON 01.04.2014 AS PER SCHEDULE XIV OF THE COMPANIES ACT 1956 IS RS 18.00 LAC.
SIR, IF WE CHARGE DEPRECIATION FULL AMOUNT OF W.D.V RS.18.00 LAC, THE COMPANY WILL INCURR HEAVY BOOK LOSS
SIR, PLEASE GUIDE ME HOW THE ACCOUNTING ENTRIES OF DEPRECIATION,DEFERRED TAX ASSET/LIABILITIES AND RETAINED EARNINGS WILL BE PASSED IN THE BOOKS
WITH REGARDS
THE ORIGINAL COST OF PLANT AND MACHINERY IS RS.100.00 LAC RESIDUAL VALUE RS.5.00 LAC.AS PER SCHEDULE II OF COMPANIES ACT 2013 THE USEFUL LIFE OF ASSET HAS ALREADY EXPIRED IN F.Y.2013-14. W.D.V OF ASSET AS ON 01.04.2014 AS PER SCHEDULE XIV OF THE COMPANIES ACT 1956 IS RS 18.00 LAC.
SIR, IF WE CHARGE DEPRECIATION FULL AMOUNT OF W.D.V RS.18.00 LAC, THE COMPANY WILL INCURR HEAVY BOOK LOSS
SIR, PLEASE GUIDE ME HOW THE ACCOUNTING ENTRIES OF DEPRECIATION,DEFERRED TAX ASSET/LIABILITIES AND RETAINED EARNINGS WILL BE PASSED IN THE BOOKS
WITH REGARDS
11 June 2015
No adjustment will be carried out in the current year and the profit for 2014-15 will not be affected.
Pass entry debiting retained earnings (reserves) retaining 5% residual value – Note 7b of the schedule.
Pass entry for deferred tax asset/liability and adjust it against retained earnings.
Pass entry debiting retained earnings (reserves) retaining 5% residual value – Note 7b of the schedule.
Pass entry for deferred tax asset/liability and adjust it against retained earnings.
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11 June 2015
RESPECTED SIR,
PLEASE PROVIDE JOURNAL ENTRY OF DEFERRED TAX ASSET/LIABILITY
PLEASE PROVIDE JOURNAL ENTRY OF DEFERRED TAX ASSET/LIABILITY
11 June 2015
It is for deferred tax liability.
Reserves and surplus Dr
To deferred tax liability Cr
I think now you will pass the entry for deferred tax asset.
Reserves and surplus Dr
To deferred tax liability Cr
I think now you will pass the entry for deferred tax asset.
11 June 2015
RESPECTED SIR,
1. RESERVE & SURPLUS DR. 13.00 LACS
TO DEPRECIATION RESERVE 13.00 LACS
(BEING AS THE USEFUL LIFE HAS ALREADY EXPIRED KEEPING 5% RESIDUAL VALUE W.D.V AS ON 01.04.2014 WRITTEN OFF RS.18.00 LACS- RS.5.00 LACS)
SIR WHAT WILL BE THE NEXT ENTRY ?
1. RESERVE & SURPLUS DR. 13.00 LACS
TO DEPRECIATION RESERVE 13.00 LACS
(BEING AS THE USEFUL LIFE HAS ALREADY EXPIRED KEEPING 5% RESIDUAL VALUE W.D.V AS ON 01.04.2014 WRITTEN OFF RS.18.00 LACS- RS.5.00 LACS)
SIR WHAT WILL BE THE NEXT ENTRY ?
12 June 2015
The entry is leaving 5 lacs for residual value:
Reserves & surplus Dr 13 lacs
To Depreciation reserve Cr 13 lacs
You work out and tell me quantum of deferred tax liability/asset.
Reserves & surplus Dr 13 lacs
To Depreciation reserve Cr 13 lacs
You work out and tell me quantum of deferred tax liability/asset.
12 June 2015
SIR,
I AM CONFUSED TO CALCULATE DEFERRED TAX ASSET/LIABILITY.
PLEASE PROVIDE JOURNAL ENTRY OF DEFERRED TAX ASSET/LIABILITY
WITH REGARDS
I AM CONFUSED TO CALCULATE DEFERRED TAX ASSET/LIABILITY.
PLEASE PROVIDE JOURNAL ENTRY OF DEFERRED TAX ASSET/LIABILITY
WITH REGARDS
12 June 2015
You tell me it is a deferred tax asset or liability then I will tell the entry.
12 June 2015
SIR,
IT IS A DEFERRED TAX ASSET
IT IS A DEFERRED TAX ASSET
13 June 2015
The entry:
Deferred tax asset Dr
To Reserves and surplus Cr
Deferred tax asset Dr
To Reserves and surplus Cr
13 June 2015
SIR,
RS.13.00 LACS HAS BEEN DEBITED TO DEFERRED TAX ASSET WHILE ONLYCURRENT TAX @ 30.9% SHOULD BE DEBITED TO DEFERRED TAX ACCOUNT
RS.13.00 LACS HAS BEEN DEBITED TO DEFERRED TAX ASSET WHILE ONLYCURRENT TAX @ 30.9% SHOULD BE DEBITED TO DEFERRED TAX ACCOUNT
16 June 2015
SIR,
PLEASE PROVIDE STEP BY STEP JOURNAL ENTRY WITH FIGURE
WITH REGARDS
PLEASE PROVIDE STEP BY STEP JOURNAL ENTRY WITH FIGURE
WITH REGARDS
16 June 2015
SIR,
PLEASE PROVIDE STEP BY STEP JOURNAL ENTRY WITH FIGURE
WITH REGARDS
PLEASE PROVIDE STEP BY STEP JOURNAL ENTRY WITH FIGURE
WITH REGARDS
16 June 2015
Only 30.90% on 13 lacs has to be debited to deferred tax asset ac.
17 June 2015
SIR,
FIRSTLY WE WILL DEBIT TO RESERVE & SURPLUS BY RS. 13.00 LAC AND THEREAFTER WE WILL CREDIT TO RESERVE AND SURPLUS BY RE.13.00 LAC IT MEAN THERE IS NO IMPACT ON RESERVE & SURPLUS
FIRSTLY WE WILL DEBIT TO RESERVE & SURPLUS BY RS. 13.00 LAC AND THEREAFTER WE WILL CREDIT TO RESERVE AND SURPLUS BY RE.13.00 LAC IT MEAN THERE IS NO IMPACT ON RESERVE & SURPLUS
18 June 2015
We will credit only 4.017 lacs (13*30.90%).
Credit entry passed only for the tax effect.
Credit entry passed only for the tax effect.
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