expense (wage for installation , trasport etc) incurred in purchase of fixed asset journal entries
2- can debit wage a/c and then tranfer the balance to asset a/c ??
6 Replies
Eswar Reddy S
(CFO- at NHTF)
(58275 Points)
Replied 05 May 2022
Yes.All incidental expenses shall be added to cost of PPE
sabyasachi mukherjee
(27849 Points)
Replied 06 May 2022
All expenses incurred incidental to bringing the asset to its working condition has to be capitalized. So it's put to use.This is as per ICAI GUIDELINES AND ACCOUNTING STANDARD.
Eswar Reddy S
(CFO- at NHTF)
(58275 Points)
Replied 06 May 2022
Directly account wages, transportation exp as PPE
PPE a/c Dr
To Bank
PPE a/c Dr
To Bank
Atharv Sankliya
(1359 Points)
Replied 06 May 2022
Can we also do this as
wages a/c dr 1000
to cash a/c cr 1000
Asset a/c dr 1000
to wages a/c cr 1000
wages a/c dr 1000
to cash a/c cr 1000
Asset a/c dr 1000
to wages a/c cr 1000
Eswar Reddy S
(CFO- at NHTF)
(58275 Points)
Replied 06 May 2022
Yes.It can be done .
Final effect is
Asset(PPE)
To Cash/ bank
Final effect is
Asset(PPE)
To Cash/ bank
CA Puja Sharma
(Chartered Accountant)
(5010 Points)
Replied 06 May 2022
You can debit all teh expenses to the particular Fixed Asset.
All these expenses are directly linked to the fixed assets
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