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Barun Nandi (CWA)     30 October 2011

What should be the accounting entry

A LTD COMPANY PURCHASE A CAR FOR THE USE OF ITS OFFICIAL PERPOSE AND IT GET A GOLD COIN FREE.HOW SUCH GOLD COIN WILL BE SHOWN IN THE BOOKS OF ACCOUNT? PLESE ANYONE ANSWER IT.



 11 Replies

Chinmay

Chinmay (Accounts Professional)     31 October 2011

That's Good Question by Mr. Barun Nandi, I think, the cost of gold coin will be treated as indirect income as discount from creditors & taken as assets. i.e. Car A/c ............ Dr. Other Assets A/c ............ Dr. To Sundry Creditors A/c To Discount From Creditors A/c. In addition if the cost of that coin will be less than Rs.5,000/- then it should be expense out as Fixed Assets Less than Rs.5,000/-, & taken 100% Depreciation......
Girish Joshi

Girish Joshi (D.G.M. (Commercial))     31 October 2011

Originally posted by : Barun Nandi

A LTD COMPANY PURCHASE A CAR FOR THE USE OF ITS OFFICIAL PERPOSE AND IT GET A GOLD COIN FREE.HOW SUCH GOLD COIN WILL BE SHOWN IN THE BOOKS OF ACCOUNT? PLESE ANYONE ANSWER IT.

Gold Coin .................. Dr

To Misc Income

     OR

To Gifts Received

 

Best regards,

SANISH.KS

SANISH.KS (ACCOUNTS EXECUTIVE)     31 October 2011

I also agree with the same 

CA Neha Jain

CA Neha Jain (Practicing CA)     31 October 2011

CA Neha Jain

CA Neha Jain (Practicing CA)     31 October 2011

in my opinion, the gold coin should be treated as  current investment as company will be willing to sell it on appreciation.

entry should be -

investments      Dr (with the market value on date of purchase of car)

      Car                    Cr

current investment will be revalued at each balance sheet date with market value.

if company intends to sell it in next three months, it should be added to cash equivelants for cashflow purpose.

 

 

 

Nisha Devnani

Nisha Devnani (Article)     31 October 2011

I AGREE WITH NEHA.

Devendra

Devendra (Chartered Accountant)     31 October 2011

I am convinced with the Answer given by Neha Ma'am. It should be shown under Investment by passing the following entry:-

Gold Coin (Investment)            Dr.       XXXX

(Grouped under Investments)

     To Car A/c                                                 XXXX

(Grouped under Fixed Assets)

[Being Gold Coin recorded as Investment]

 

Regards,
Devendra K

 

Bhaskar Unnikrishnan CPA CMA

Bhaskar Unnikrishnan CPA CMA (Accounts / Administration)     01 November 2011

Originally posted by : CA Neha Jain

in my opinion, the gold coin should be treated as  current investment as company will be willing to sell it on appreciation.
entry should be -
investments      Dr (with the market value on date of purchase of car)
      Car                    Cr
current investment will be revalued at each balance sheet date with market value.
if company intends to sell it in next three months, it should be added to cash equivelants for cashflow purpose.
 
 
 

Right answer for this case...

deepali agarwal

deepali agarwal (Company Secretary)     01 November 2011

agree with neha mam...........

Hemanth Sai

Hemanth Sai (CA-FINAL,AUDIT TRAINEE)     02 November 2011

agree with neha mam..

if it was encashed immediately then

cash a/c dr  xxx

  to car a/c     xxx

Pandit Kolekar

Pandit Kolekar   19 April 2018

one businessman has purchased gold of Rs 217924 in 2011-12 and sold Rs 254450 in 2017-18 so how to calculate capital gain tax on it and what amount of tax was pay to govt.

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