Shop Purchase advance

it would go in "fixed assets" as it would be shop and on which the assesee will do some business.

all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved) 

once the business get started, he will be entitled to avail depreciation from business profit.

Originally posted by : U S Sharma
	it would go in "fixed assets" as it would be shop and on which the assesee will do some business. all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved)  once the business get started, he will be entitled to avail depreciation from business profit.

 Dear Sir

Please clear this also "avail depreciation from business profit."

Thanks a lot

Arshad

y a/c - - -- - - - - - dr.600000

   to cash 100000

to bank500000

(being advance for asset purchase given)

after i month

asset a/c --- - - - - - - - -- dr.1100000

to y 600000

to bank500000

it will go under fixed asset

Originally posted by : RADHEKRISHNA0001
	y a/c - - -- - - - - - dr.600000    to cash 100000 to bank500000 (being advance for asset purchase given) after i month asset a/c --- - - - - - - - -- dr.1100000 to y 600000 to bank500000 it will go under fixed asset

 Dear Sir

can we take y a/c as under loan & advance a/c.

thanks

arshad

1) its a Fixed asset ( commercial)

2) is going to be purchased

3) it would be commercial property ( shop)

a) if we look from the view of capital gains, then on very 1st transaction you have to take the payment made to fixed asset, as on the agreement also this date is mentioned that you have tendered the amount such date, which is effective date of property in existance with you, in near future if u sell off the property then 1st payment date would be considered as your date of aquisition.

b) as the shop you are going to purchase, means you have to do some business with it, or within it, or rent it. if you put it on rent, then 30% deduction of rent is available to you u/s 24, if you do business with this property then yearly value depriciation is available to you @ 10% (i.e. your taxable business profit will get reduced by 10% due to depriciation)

c) if you wish to buy and sell the shop in short term, then also we shall recomend you to put it in fixed asset, as capital gain would be available in "property" definition better way.

Originally posted by : Muhammad Arshad Ashrafi
	Originally posted by : RADHEKRISHNA0001 y a/c - - -- - - - - - dr.600000    to cash 100000 to bank500000 (being advance for asset purchase given) after i month asset a/c --- - - - - - - - -- dr.1100000 to y 600000 to bank500000 it will go under fixed asset  Dear Sir can we take y a/c as under loan & advance a/c. thanks arshad

yes it is a advance for fixed asset purchase

Dear Arshad,

As far as entries are concerned,   RADHEKRISHNA0001   has correctly mentioned the same, provided the shop is purchased out of the business funds. under this case, shop has to be shown under fixed assets of the business. However, if the funds have newly been invested by the proprietor, then enteries would slightly be changed (which is assumed to be an unlikely situation).

Furthermore, besides the answer provided by the aforesaid member, instead of debiting Y's account, an account to be called as "Advance against shop" could have been opened, and the same would have been closed instead of Y's account.

On the basis of available information, the aforementioned suggestions could have been given.

Let me know, in case of any associated query.

Best Regards,

Boss.

Originally posted by : U S Sharma
	1) its a Fixed asset ( commercial) 2) is going to be purchased 3) it would be commercial property ( shop)   a) if we look from the view of capital gains, then on very 1st transaction you have to take the payment made to fixed asset, as on the agreement also this date is mentioned that you have tendered the amount such date, which is effective date of property in existance with you, in near future if u sell off the property then 1st payment date would be considered as your date of aquisition. b) as the shop you are going to purchase, means you have to do some business with it, or within it, or rent it. if you put it on rent, then 30% deduction of rent is available to you u/s 24, if you do business with this property then yearly value depriciation is available to you @ 10% (i.e. your taxable business profit will get reduced by 10% due to depriciation) c) if you wish to buy and sell the shop in short term, then also we shall recomend you to put it in fixed asset, as capital gain would be available in "property" definition better way.

Dear Sir

how can i make entry of cash payment to advocate of fee when registry the shop, we have no document of payment to advocate fee

Regards

Arshad

Advance Payment

Y A/c   Dr. 6,00,000 (Group under Sundry Creditors)



   To Cash Cr. 1,00,000 



   To Bank Cr. 5,00,000



(Being advance towards Purchase of Building)



After Balance Payment



Building's A/c Dr. 11,00,000 (Group Under Fixed Asset)



   To Y A/c Cr. 6,00,000



   To Bank A/c Cr. 5,00,000



(Being Purchase of Building and enter the details like date of purchase etc. )

Originally posted by : Vinod
	Advance Payment Y A/c   Dr. 6,00,000 (Group under Sundry Creditors)    To Cash Cr. 1,00,000     To Bank Cr. 5,00,000 (Being advance towards Purchase of Building) After Balance Payment Building's A/c Dr. 11,00,000 (Group Under Fixed Asset)    To Y A/c Cr. 6,00,000    To Bank A/c Cr. 5,00,000 (Being Purchase of Building and enter the details like date of purchase etc. )

thanks for reply please answer my below query,

Dear Sir

how can i make entry of cash payment to advocate of fee when registry the shop, we have no document of payment to advocate fee

Regards

Arshad

Without proper documents & proofs it is not valid

Originally posted by : U S Sharma
	it would go in "fixed assets" as it would be shop and on which the assesee will do some business. all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved)  once the business get started, he will be entitled to avail depreciation from business profit.

Agreed !