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New building construction accounting

Srinivas Ch (Sr.Accountant) (365 Points)

28 March 2016

Hi dear experts, pls tell me what are the entries to be taken in (sole proprietory) 2 saperate tallies if constructing new hospital building but funds transferred from present running hospital bank accounts. is there separate tally for new construction? pls tell me very very urgent. i have to finalise the accounts.

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3 Replies

Saliq Ansari (CA_Final Student) (885 Points)
Replied 29 March 2016

IF the new hospital which is being constructed is going to be operated in the name of the original hospital (existing one) then this would amount to just extention in business and no seperate tally is to be created Entries in this case would be to debit the amount to the Capital Work in Progress (CWIP) in Fixed Assets, when the hospital is completed trf the amount in CWIP to Building.

IF the new hospital is to be operated with a name that is different from that of the original then you should create a new tally for such transaction. In Original Hospital you have to show the amount in Investments.

Srinivas Ch (Sr.Accountant) (365 Points)
Replied 12 July 2016

the present hospital running in rented building. now my boss constructing his own hospital since last 3 years. how can I take entries under investment head? pls clear my doubt..