CA Kishan Kabra (CA) (173 Points)
06 August 2013Respected Sir / Madam
Please Give me the suitable treatment for year 2010-11, 2011-12, 12-13 in Receipt and payment account, Income and Expenditure account, and balance sheet.
Payment made by Ram for purchasing assets for Shyam in year 2010-11 for Rs. 10000.
In year 11-12 Shyam did not make any payment to Ram for the purchase.
In 12-13 Shyam made the payment to Ram.
Thanks in Advance.
Prashanth S K
(Practice)
(148 Points)
Replied 06 August 2013
Receipts and Payment A/c is nothing but your cash book. Income and Expensiture A/c is nothing but your P & L. Hence in the year 2010-11 Asset will be shown under Fixed Assets and Ram will be shown as a creditor in the Balance Sheet.
In the year 2011-12 no entry related to this is to be passed other than any depreciation provided on the asset.
In the year 2012-13 Ram will be debited and your cash/bank will be credited wherein Ram will be shown on the payments side of your receipts and payments.
Shivani
(Learner)
(1881 Points)
Replied 16 September 2013
Experts please check the entries in this regard
10-11
Fixed Asset 10000
To Cash 10000
Shyam 10000
To Fixed Assets
11-12
No entry
The fixed asset is not of Ram. Then it should not be treated as fixed asset by him and hence no depreciation.
12-13
Cash 10000
To Shyam 10000
Shivani
rajeev
(Accountant)
(159 Points)
Replied 21 September 2013
1) Is it partnership firm of Ram & Shyam.
2) If no then it will treat as loan.
Please clarify otherwise entries go wrong.
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 05 October 2013
Dear Kishan,
RECEIPT AND PAYMENT is mere Cash Accounts therefore any cash related transactions will reflect in Reeipt and Payment Account.
IN THE BOOK OF RAM
Year 2010-2011........ Cash paid to Receivable / Shyam Rs. 10,000
Year 2011-2012........ No Change
Year 2012-2013........ Cash received from Receivable / Shyam Rs. 10,000
INCOME AND EXPENDITURE IS NOTHING BUT PROFIT AND LOSS ACCOUNTS. It means all expenses and income related transaction reflects here.
IN BOOKS OF RAM
Since no expense and loss transaction is effected in this transaction for Ram there fore No affect in 2010-2011, 2011-2012, 2012-2013
BALANCE SHEET IS A STATEMENT THAT REFLECTS TOTAL ASSETS AND TOTAL LIABILITY
Year 2010-2011........ Rs. 10,000 is classified under Receivables
Year 2011-2012........ No Change
Year 2012-2013........ Amount paid by Shyam therefore receivables are reduced by Rs. 10,000
IN THE BOOK OF SHYAM
RECEIPT AND PAYMENT ACCOUNT
Year 2010-2011........ No cash transaction in this year therefore nothing will appear
Year 2011-2012........ No Change
Year 2012-2013........ Amount paid by Ram therefore payable are reduced by Rs. 10,000
Year 2011-2012........ Depreciation will give affect to Expense side
Year 2012-2013........ Depreciation will give affect to Expense side
Year 2011-2012........ No Change
Year 2012-2013........ Payable are decreased
CA Mitesh N Kothari
(9821662799)
(391 Points)
Replied 05 October 2013
In the year 10-11
Fixed asset a/c dr 10000
to Shyam 10000
in the year 11-12
Depreciation is to be claimed (substance over form)
Depreciation a/c dr
to Fixed asset
In the year 12-13
Shyam a/c dr 10000
to cash/ bank a/c
CA Mitesh N Kothari
(9821662799)
(391 Points)
Replied 05 October 2013
| Originally posted by : Shivani | ||
 |
Experts please check the entries in this regard 10-11 Fixed Asset 10000 To Cash 10000 Shyam 10000 To Fixed Assets 11-12 No entry The fixed asset is not of Ram. Then it should not be treated as fixed asset by him and hence no depreciation. 12-13 Cash 10000 To Shyam 10000 Shivani |
 |
In The year 10-11 we are not paying any cash so it will be directly
Fixed a/c dr 10000
to Shyam A/c
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 05 October 2013
Dear Shivani,
Receipt and Payment Accounts, Income and Expenditure Accounts and Balance Sheet are the statements which reflects some specific type of transactions.
Accounting Entries are for recording transactions but these statements reflects balances which helps financial manager to analyse accounts such current assets fixed assets.
Under these statements main emphasis are made on classification transaction under correct head to reflect true picture.
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 05 October 2013
Dear Mitesh,
Ram is purchasing goods for shyam. So its fixed assets of Shyam.
You have considered the case as Ram has purchase fixed assets from Shyam.
CAclubindia
