Machinery of constructions business

Dear All,

 

My company is engaged in construction services. We have concrete mixing machines which require hose and concrete spraying gun at the end of hose.

We have many of such machinery, hoses, spraying guns etc. As our projects are in different location, we issue such macinery and when the project is completed, all these machinery/equipments are returned.

The hoses can be used with equipments other than the above concrete mixing equipments using joints, coupling etc.

If such hoses are damaged, we buy new hose, joints, coupling etc.

What must be the accounting treatments for damaged hoses?

Whether new hoses must be capitalized or simply account as repairs ?

 

 

 

Replies (3)

im my opinion if you adjust these parts in newly purchase equipment price than it should be treat as repair charges otherwise you should capitalized these parts.

 

 

You need to write off the damaged hoses and capitalize the new one...

Thank you Mr. Bhasker and Mr. Rahat.

I am working in Saudi Arabia. I think, Mr. Bharker is right.

We have some spare parts for which we keep stock records. The spare parts are rotors used in concrete mixing machinery.

What are the accounting entries while purchasing these spare parts?

What accounting entry must be passed when these parts are issued?

 

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