Journal entry and depriciation
This query is : Resolved
18 April 2012
A company purchase a fixed assets for rs100000 and received a tempo as a gift what will be journal entry for purchase and depriciation entry on tempo @ 20% p.a
18 April 2012
Fixed Assets A/c 100,000
To Bank A/c 100,000
Tempo A/c Dr.
To Gift from Company
You can not claim depreciation of tempo bcz u did not spend any amount for purchasing tempo.
Tempo RC value is taxable for your business income Under head PGBP of basic charging section 28
To Bank A/c 100,000
Tempo A/c Dr.
To Gift from Company
You can not claim depreciation of tempo bcz u did not spend any amount for purchasing tempo.
Tempo RC value is taxable for your business income Under head PGBP of basic charging section 28
18 April 2012
Disagree with expert. No person will given any benefit free of cost in business. There will be any advantage or benefit behind that.
The gift obtained is not pursuant to the business of the assessee. The offer will be the same for all customers. i.e. the cost of tempo is already included in the fixed asset cost. However, since the same cannot be ascertained, it will be accounted in books at 0 cost.
Entry is
Fixed Asset A/c Dr 100,000
Tempo A/c Dr 0
To Liability A/c 100,000
The tempo will be included in the FA Register of the Company and the same will not be treated as income.
The gift obtained is not pursuant to the business of the assessee. The offer will be the same for all customers. i.e. the cost of tempo is already included in the fixed asset cost. However, since the same cannot be ascertained, it will be accounted in books at 0 cost.
Entry is
Fixed Asset A/c Dr 100,000
Tempo A/c Dr 0
To Liability A/c 100,000
The tempo will be included in the FA Register of the Company and the same will not be treated as income.
18 April 2012
i think for accounting purpose assets must carry some value, therefore it should be recorded at nominal value i.e rs 1
and what about depriciation on tempo
and what about depriciation on tempo
19 April 2012
Not required. It can be accounted at 0 cost. There will not be any depreciation for it.
19 April 2012
thanks a ton ,but then what will be the carriying figure of tempo in balance sheet,and why depriciation sud not be charged
19 April 2012
Carrying amount will be 0. Depreciation cannot be claimed since the cost of the asset is 0.
19 April 2012
sir, what will be situation if the cost of tempo for others were one lakh but we recvd it for free
11 May 2012
Even in such a case, cost of tempo will not be recognised because you have not incurred any expense for it.
You cannot claim benefit of depreciation.
You cannot claim benefit of depreciation.
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