Journal entry

1) 10000 spent on construction of building (building a/c to cash a/c is wrong entry)

2) goods purchased 50000 (including vat 500). vat is applicable on dealer.

3) 149 acre land received free of cost from central govt. rs. 100 crores

 

Replies (4)
1) WIP (construction) a/c Dr 10000 To Cash a/c 10000 2) Goods a/c Dr 49500 Input Vat a/c .Dr 500 To Sundry cr (cash) 50000 3) Land a/c Dr Rs.100/- To Profit & loss a/c Rs.100/- (Being land received at free of cost then such fixed asset should be recorded at nominal value as per AS-12) T

1. Construction WIP a/c                    Dr. 10,000

                  To Cash a/c                                                    10,000

2. Goods Purchases a/c                     Dr. 49500

     Input Vat a/c                                      Dr.      500

                   To S. Creditors/ Cash/ Bank/ B/R a/c           50.000

3. Land  a/c                                            Dr.     100

                 To P & L A/c                                                         100

.

 

 

  Dr Cr
WIP Buildings A/C Dr 10000  
To Cash a/c    10000
Purchase A/C Dr 49500  
Input Vat A/C  Dr 500  
To Creditor/Vendor/cash/bank 50000
Assets/land A/C 500  
To P&L A/C   500

 

If construction is complete then- Building A/c Dr. 10000 . To Cash/Bank A\c 10000 if still in Wip then- WIP A/c Dr. 10000 . To Cash/ Bank a/c 10000

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