Warranty claim

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 March 2012 Dear Sir,

I have purchase a engine from mahindra dealer and make the payment for the same, but I found that the same is defective, I approached the mahindra & Mahindra for the engine. Now M&M is agree to make the payment against warranty claim.

Now, Please help me to pass the accounting entries for the same.

thanks & regards
Deepak Gupta

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

12 April 2012 Since the machine is defective, it needs to be scrapped off. Calculate the WDV of the machine till the date of discard. Deduct the claim amount given by M&M and the balance shall be either gain / loss on sale of asset.