M/ S” “X” IS A SOLE PROPRIETORY CONCERN WAS DOING THE BUSINESS OF JOB WORK OF KITCHEN INTERIOR AND M/S” Y” CO. DOING TRADING ACTIVITY FOR PURCHASING RAW MATERIALS (KITCHEN ITEMS) AND SOLD IT TO M/S X CO (M/S “Y” CO SOLD M/S.”X” CO ONLY AND “X” CO AND “Y” CO HAVE SEPARATE TIN NUMBER) FOR DOING THE JOB WORK AND ALSO “X” CO PURCHASING RAW MATERIALS DIRECTLY FROM OUSIDE SUPPLIERS. “X”CO AND “Y”CO CAN CONTROL UNDER THE SAME MANAGEMENT. M/S. X CO RECEIVED INCOME FROM CUSTOMERS ON THE FOLLOWING BASIS
BEFORE STARTING THE WORK – RECEIVED 50%
AFTER COMPLETING THE STRUCTURE – RECEIVED 30%
COMPLETION OF WORK – 20%
I HAVE SOME DOUBTS REGARDING SOME OF THE TRANSACTION THAT IS TO BE MENTIONED AS FOLLOWS (M/S.”X”)
- AMOUNT (ADVANCE) RECEIVED FROM CUSTOMERS SHOULD BE GROUPED UNDER CURRENT ASSET OR CURRENT LIABILITY, IF IT IS TREATED AS CURRENT LIABILITY,AT THE END OF THE FINANCIAL YEAR THE WORK IS NOT COMPLETED WHAT TREATEMENT SHOULD BE MADE FOR THE BALANCE AMOUNT TO BE RECOVERED FROM CUSTOMER (EG. X ENTERED IN TO AN AGREEMENT RS. 100000/- FOR COMPLETING THE JOB WORK. MR.A MAKE 3 PAYMENTS RS.25000,25000,25000 RESPECTIVELY BALANCE OF PAYMENT TO BE RECOVERED FROM A AT THE END OF THE FINANCIAL YEAR IS RS.25000/- WHAT TREATEMENT SHOULD MADE FOR THIS 25000/-)
- AFTER THE COMPLETION OF CONTRACT ( THE ABOVE MENTIONED EXAMPLE SHOULD TAKEN) THE TOTAL AMOUNT RECEIVED FROM PARTY IS TO BE REFLECTED IN P&L STATEMENT.IS THE WHOLE 100000/- IS TO BE TAKEN IN P&L AS SALE OR ICOME FROM JOB WORK.IF IT SHOULD BE TAKEN AS SALE ANY BILL SHOULD BE RAISED AGAINST PARTY? OR ANY OTHER TREATMENT IS TO BE MADE? WHAT TREATEMENT SHOULD MAKE FOR THIS BASED ON AS 7?
- THE FOLLOWING ARE TO BE TREATED AS AN ASSET OR IT IS TO BE TREATED AS REPAIRS AND MAINTENANCE?
- PRINTER
- UPS
- COMPUTER MONITOR ONLY
- CAR AND BIKE (USED FOR BUSINESS PURPOSE ONLY)
- LAPTOP PURCHASE FOR MANAGER
- EPABX SYSTEM
- WHAT TREATEMENT SHOLULD BE MADE FOR THE AMC AMOUNT FOR MACHINERIES INSTALLED FOR DOING THE JOB WORK, AIR CONDITION AND ANY ASSETS
- VAT ON PURCHASES (M/S.X – JOB WORK) WAS NOT TAKEN ANY CREDIT ON INPUT VAT BECAUSE THEY FILED RETRURN ON COMPOUNDING EFFECT. IS VAT ON PURCHASE WILL BE TREATED AS EXPENSE OR CURRENT LIABILITY.
- THE GROSS RECEIPT FROM JOB WORK IS ABOVE 10 LAKH WORKS CONTRACT ATTRACT SERVICE TAX ?
- IN PRACTICAL SENSE WORK CERTIFIED AND WORK UNCERTIFIED, WORK IN PROGRESS RESERVE IS TO BE SHOWN IN ACCOUNTS
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