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Ceiling fan than Rs.5000 accounting treatment

22 September 2020

Dear Experts,
our company purchased 6 ceiling fans of Rs.1350 each
what will be the accounting treatment of this transaction

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4 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14599 Points)
Replied 22 September 2020

RCM not applicable , More than 5000/- RCM has been scraped .

Pass J.E in the companies books as follows if GST charged .

Fans A/c Dr

CGST A/c Dr

SGST A/c Dr

To Trade Creditors A/c Cr

( Booking entry for purchase of Fan )

Fans under Non current assets - balance sheet

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Manoj Bhardwaj (51 Points)
Replied 22 September 2020

Sir, price of single fan is Rs.1350 only, how to book under non current assets

prasad Nilugal ( GST Practitioner & Accounts ) (14599 Points)
Replied 22 September 2020

Is CGST & SGST included in cost 1350/- ? , if not then you can show 8100/- ( 1350*6 ) total amount in balance sheet under head fans and write in narration , each fan for 1350/-

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 22 September 2020

An asset should be capitalized if it is not held for resale but for the production, supply, rental or administrative purposes and it is expected to be used for more than one accounting period. So, you can capitalised the Amount of ceiling fans purchase in your books of account as mentioned by Prasad Nilugal ji.
or if Amount is not material as per your business transaction, than you can Expensesed out this amount directly to Profit and loss Account...