Accounting Treatment

This query is : Resolved

Devendra (Querist)
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12 November 2010 If in a business entity, the WDV of the Machinery is Rs. 250000 and in the last month the machinery one of the machinery in the block worth Rs. 25000 is damaged and is of no use, then what is the treatment to be made in such situation?

Regards,
Devendra Kulkarni

Jalpa Shah

Jalpa Shah (Expert)
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12 November 2010 You can claim depreciation at 15% on Rs. 250000.

If u have sold that damaged machinery then first u have to deduct the sale consideration from the block and on net amount claim depreciation at 15%

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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12 November 2010 As per Account:
No treatment if only damaged. If sold as scrap you can make following entry entry.

Depreciation A/c Dr....
Cash/ Bank A/c Dr.....
Loss on sale A/c Dr...
To Plant & machinery A/c.

As per income tax you can only continue claiming depreciation.

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