Advance in contract entries

CMA Shilpa somani (CWA final cleared) (93 Points)

01 May 2015

in one contract of 3 years....we have paid full amount of 300000 in advance on 1 oct 2009 for the period of 3 years starting on same day mean 1 oct 2009. what would be entries for this in acounts on 1 oct and on 31 march 2010. and beginning of year 1 april 2010

Reply
Follow
Share

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 01 May 2015

What type of contract is this. Please elaborate your query so that proper accounting entries can be given.

CMA Shilpa somani (CWA final cleared) (93 Points)
Replied 01 May 2015

its maintenance contract

Muniswamy nayak veerabhadrappa (Smilax Laboratores Limited Jeedimetla) (104 Points)
Replied 02 May 2015

Even it is a Maintenance Contract, any advance given prior to commencement of Work, TDS at

applicable rate has to be deducted first before debiting the contractor.

M Veerabhadrappa

Smilaxlaboratories limited

Jeedimetla, Hyderabad

CMA Shilpa somani (CWA final cleared) (93 Points)
Replied 02 May 2015

than what would be entries for this in accounts

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 04 May 2015

Entry would be as follows:

Contractor account Dr xxxxxx (This is for advance paid)

To- TDS xxxxxx

To- Bank xxxxxx

For payment of TDS

TDS Dr xxxx

To- Bank xxxxx

Start a New Discussion