27 January 2015
Purchase machinery costing Rs40,000 on credit from X ltd and paid Rs1000 as transport charges and Rs500 as erection charges. Query:Whether below understanding is correct? Machinery A/c Dr 40000 To X ltd A/c 40,000 (Journal voucher F7)
Transport Charges A/c 1000 Erection charges A/c 500 To Cash A/c 1500 (Payment Voucher F5)
28 January 2015
As per AS- 10 , we need to capitalise the expenses incured till the asset bring to location and make running. So your transportation charges and erection related to machinery need to capitalise.,so,use F-7
pass the jv capitalising the Rs.41500 ( 40000/1000/500) debit machinery and credit X ltd accordingly Rs.40000 and balance credit as expense payable or some other payable ledger and make payment entry accordingly
CAclubindia
