Guest house expense accounts head

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 May 2013 under which head the following items purchased be classified in case of GH of a company :
1)Blanket- Rs. 2500 per blanket Bed- Rs. 3500, Matress- Rs. 30000 bought 15 qty each at different times on need basis
2) Torch of Rs.900 each qty 12 bought at dfferent times
3)Oven for a Guest House
4) TV for a GH
5) Refrigertaor- for GH

under which head the following items be purchases in case of mining company
1) Gum boots- life 1.5 year bought 25,Rs. 900 per pc
2) Safety shoes - life 2years of Rs. 1800 each bought 25
3) Locks - for the doors of GH 20 in qty. of Rs. 200- Rs. 400 each
4) Rain Coats, safety uniform

Ganeshbabu K

Ganeshbabu K (Expert)
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26 May 2013 Gum boots,safety shoes,locks , rain coats and safety uniform can be booked to factory maintainance

Guest house expences it is better to booked to guest house expences only

and from this we can also see that we can know how much expenced to guest house for year.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2013 but how far is it justified for the the blankets,bed, Mattress which is not a small amount to charge as Guest house expenses and their life is more than 3 years and for the gumboot whose benefit will derive for more than 1 year,, further the above items are for a mining company there is no factory as such ?

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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2013 If any expert can reply on the same plz reply

Ganeshbabu K

Ganeshbabu K (Expert)
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26 May 2013 None of asset was cost of more than 5000(if u see individually) in such a cases we can depreciate in one year generally we charge such expences to p&L account,

no need to maintain gumboots,rain coats ,beds, all these small amounts not required to capitalize as assets

And guest office blanket,bed every thing are not expected to use more than 1 year even though we use also we will depreciate it for one year.

so it is ok with charging it to p&L account,

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Querist : Anonymous

Querist : Anonymous (Querist)

26 May 2013 where the bed and mattress are to be used together since they cannot be used separately or u can assume that if the cost is more than Rs. 5000 then what will be treatment? further what is the head for the TV, Ref., Oven ? Also, suppose the company is having curtains and Blankets more than Rs 15000 value per curtain/Blanket then what will be the heads ? what will be the heads for the Gum boot, rain coat since they cannot be put in a factory maintenance since their is no factory, please reply in lay man language and thanks for taking interest in the query.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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13 July 2013 You have to capitalise all the expenses as Guest house Lenin and depreciation is to be claimed every year besides other expenses which are o revenue nature.