hello friends we have a registered office at Mumbai and a branch
at Bangalore, now all payments are made from Mumbai of banglore branch. we have purchase an asset in name of banglore branch and made a payment from Mumbai branch so what accounting entry has to be passed for the transaction and how the asset will be valued that who will claim the depreciation on it, eventhough we are preparing a consolidated balance sheet. please reply.
Menu
Branch accounting asset purchase
Replies (9)
Quick Summary
All branch assets are controlled by head office . So asset is booked at ho. Branch will book maintainence.
In the Bangalore branch book entry for Asset.
Asset A/c Dr
To Mumbai Office A/c Cr
( Asset purchase by H.O for Branch)
-------------------------------------------------
In the books of Head office ( Mumbai branch)
Bangalore Branch A/c Dr
To Bank A/c Cr
( Asset purchase for branch and payment made )
Even though you are maintaining consolidated financial statements, Asset & Liabilities will transfer to H.O at the end of the year from branch.
Take others opinion as well.
Asset A/c Dr
To Mumbai Office A/c Cr
( Asset purchase by H.O for Branch)
-------------------------------------------------
In the books of Head office ( Mumbai branch)
Bangalore Branch A/c Dr
To Bank A/c Cr
( Asset purchase for branch and payment made )
Even though you are maintaining consolidated financial statements, Asset & Liabilities will transfer to H.O at the end of the year from branch.
Take others opinion as well.
Asset purchase entry
Asset purchase entry is first one , Correct me if any thing wrong.
There are other entries
@ Sabyachi Mukherji
bro , You also can pass other entries.
Purchases dr.
Cr. Bank
(Asset cannot be capitalized in Mumbai office)
Dr. bank
Cr. purchases written off
(when Bangalore branch pays you for it)
Thats it! transfer the asset to other branch in Bangalore. Depreciate it Bangalore branch only.
In Bangalore books
Dr. Asset
Cr. Bank.
(asset gets capitalized)
if we do purchases entry, then balance sheet wont tally. During consolidation you wont have a clue of this transaction
P+S purchases
P+S bank
P+S assets
As per the query all the payments of Bangalore branch were made form Mumbai office only , Bangalore branch is not paying back .
In the books of Mumbai office I made short entry as above , it should be
Bangalore branch A/c Dr
To Creditors A/c Cr
( Asset purchase for branch office )
Creditors A/c Dr
To Bank A/c Cr
( payment to creditors by H.O for purchase of Asset of branch )
Ok. It's the debtors method it seems and not interested in that. But branch is owned by company which means it's an asset.
Dr. asset
Cr. Bank
(Purchase of asset)
Dr. Branch assets ac
Cr. Asset
Taxes are paid by main office and depreciation must be done by main office because it needs to recover taxes paid included in the assets if it's a fully depreciable asset.
This is final accounts version
Recent Topics :
- SUPPLEMENTARY AGREEMENT FOR ADDING A PARTER IN TN
- Part availmement of ITC in case of rejection of su
- Due date for itr 5 no audit with loss for fy 25 26
- Capital Gains Mismatch AIS
- Inward E-way bill from Tally Prime 7.1
- Query regarding exemption under Section 10(10AA) &
- NPO registered under sec 8 itr filing
- Form 144 (Earlier 27Q) – Reason Code (A/C/G/
- Nps taxation
- Representative assessee
Related Topics :
CAclubindia
