Journal entry and depriciation
This query is : Resolved
CA Rohit Sinha
(Querist)
18 April 2012
A company purchase a fixed assets for rs100000 and received a tempo as a gift what will be journal entry for purchase and depriciation entry on tempo @ 20% p.a
Ravi Jhamb
(Expert)
18 April 2012
Fixed Assets A/c 100,000
To Bank A/c 100,000
Tempo A/c Dr.
To Gift from Company
You can not claim depreciation of tempo bcz u did not spend any amount for purchasing tempo.
Tempo RC value is taxable for your business income Under head PGBP of basic charging section 28
To Bank A/c 100,000
Tempo A/c Dr.
To Gift from Company
You can not claim depreciation of tempo bcz u did not spend any amount for purchasing tempo.
Tempo RC value is taxable for your business income Under head PGBP of basic charging section 28
CA Kishore Tallam
(Expert)
18 April 2012
Disagree with expert. No person will given any benefit free of cost in business. There will be any advantage or benefit behind that.
The gift obtained is not pursuant to the business of the assessee. The offer will be the same for all customers. i.e. the cost of tempo is already included in the fixed asset cost. However, since the same cannot be ascertained, it will be accounted in books at 0 cost.
Entry is
Fixed Asset A/c Dr 100,000
Tempo A/c Dr 0
To Liability A/c 100,000
The tempo will be included in the FA Register of the Company and the same will not be treated as income.
The gift obtained is not pursuant to the business of the assessee. The offer will be the same for all customers. i.e. the cost of tempo is already included in the fixed asset cost. However, since the same cannot be ascertained, it will be accounted in books at 0 cost.
Entry is
Fixed Asset A/c Dr 100,000
Tempo A/c Dr 0
To Liability A/c 100,000
The tempo will be included in the FA Register of the Company and the same will not be treated as income.
CA Rohit Sinha
(Querist)
18 April 2012
i think for accounting purpose assets must carry some value, therefore it should be recorded at nominal value i.e rs 1
and what about depriciation on tempo
and what about depriciation on tempo
CA Kishore Tallam
(Expert)
19 April 2012
Not required. It can be accounted at 0 cost. There will not be any depreciation for it.
CA Rohit Sinha
(Querist)
19 April 2012
thanks a ton ,but then what will be the carriying figure of tempo in balance sheet,and why depriciation sud not be charged
CA Kishore Tallam
(Expert)
19 April 2012
Carrying amount will be 0. Depreciation cannot be claimed since the cost of the asset is 0.
CA Rohit Sinha
(Querist)
19 April 2012
sir, what will be situation if the cost of tempo for others were one lakh but we recvd it for free
11 May 2012
Even in such a case, cost of tempo will not be recognised because you have not incurred any expense for it.
You cannot claim benefit of depreciation.
You cannot claim benefit of depreciation.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst credit note by supplier
- Reward for festival
- 18% Rent a cab
- Movement of goods by packers and movers - type of sale - Reg.
- Missed uploading GST Invoice
- RCM and same line
- Appointment of Auditor By Form ADT-1
- TDS Return Statement Status
- ARCA LOGIN
- Accounting Treatment of Civil work to install PORTA Cabin for office use
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
- ITC not to be taken in accounts & GSTR-3B
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
