sumit bhatia (ca-final article) (368 Points)
17 January 2013Do anyone have any idea that how can an entity who is not in farming will account for LIVESTOCK in its books of accounts(Other than stock in trade)
Uday B. J.
(Full Time Job)
(99 Points)
Replied 17 January 2013
if the entity is not in farming business than livestock will be treated only as it's stock in trade, but if you treat it as fixed assets than accouonting will be like this-
1.) While purchasing
Live stock a/c DR.
To Cash/bank a/c Cr.
-- we can not charge depreciation on it, as life can not be estimated therefor there will be no entry for dep.
2.) Entry when livestock is dead / discarded
Cash/bank a/c DR.
(amt. recovered from sale of live stock or if its dead than amt. recovered from its residue)
To Live stock CR.
-- Diff in live stock a/c will be profit / loss from its disposal and it will be transfered to P/L account.
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