Journal entries

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Saikat Banerjee (Querist)
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24 January 2020 Ours is a pvt ltd company in the shipping sector. Recently at the time of berthing of a vessel in our berth an accident took place resulting to some damage being done at our jetty. We estimated the cost of repairing the same which came to Rs.76600+gst@18% totaling to Rs.90388/- which the ship owner had already paid to us. The repairing job undertaken by one of our contractor is going to be completed shortly. My question is the accounting entries to be passed for the receipt of Rs.90388/- & also when the repairing charges pmt of the same amt is to be made.

Akash Monwani

Akash Monwani (Expert)
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24 January 2020 In above Case the one thing you absent mention is Whether the Contractor who is undertaking the repairing Job is issuing Invoice in your name or in the name of Ship Owner . I will Cover Both the Situations.
1. Assuming that Bill is Raised in your Name.( You Need to Issue Invoice to Ship Owner

On Receipt of amount From Ship Owner
Cash/ Bank Dr.
To Ship owner A/c

On Receipt of Bill From Contractor
Repair & Maintenance Exps Dr.
Input GST Dr.
To Contractor A/c

On Issue of Bill To Ship Owner
Ship Owner A/c Dr.
To Repair & Maintenance Exps
To output GST

2. Assuming that Bill is Raised in Owner Name.
On Receipt of amount From Ship Owner
Cash/ Bank Dr.
To Ship owner A/c

On Payment of amount to Contractor
Ship owner A/c Dr.
To Contractor
Contractor Dr.
To Cash/ Bank