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Depreciation

01 October 2019

I am working in a pharmaceutical wholesale shop as accountant.Can i charge depreciation on the assets here on whichever method convenient to me?? is there any rule saying that i should calculate depreciation in a particular method only???

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15 Replies

Kumar Sushank (General Manager - Finance) (1040 Points)
Replied 01 October 2019

Yes, you can choose any method but depreciation rate will be also accordingly.

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 01 October 2019

Is Your Pharmacy is Ltd or Pvt Ltd or others...?

Hashim Hakkim (26 Points)
Replied 01 October 2019

No,it's a pvt wholesale firm..sole proprietorship firm.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 01 October 2019

Then You can depreciate Your assets as per income tax rates...

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Hashim Hakkim (26 Points)
Replied 01 October 2019

Ok sir..how to charge it??means whether i need to put entries every months(total dep/12)or a single entry annually??

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 01 October 2019

You can provide single entry on annually...

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Hashim Hakkim (26 Points)
Replied 01 October 2019

Ok sir..thank u for the information

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 01 October 2019

You are most welcome dear

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Hashim Hakkim (26 Points)
Replied 02 October 2019

1)Can i put journal entries for depreciation every month??is it compulsory to put depreciation journal entries at the end of the financial year only??
2)In my firm accumulated depreciation is maintained.so please help me with journal entries on depreciation in this case

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 02 October 2019

1. Yes... You can.

2. Dr. Depreciation A/c
Cr. Fixed Asset A/c

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Hashim Hakkim (26 Points)
Replied 02 October 2019

Sir then what about accumulated depreciation???
=Dr. Depreciation A/c
Cr.Accumulated Depreciation A/c

=Dr.Accumulated dep A/c
Cr Fixed Asset A/c

Is this right sir???

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 02 October 2019

This is okay

=Dr. Depreciation A/c
Cr.Accumulated Depreciation A/c

for example :
If asset cost - 100
depreciation - 10 ( x 3 years) = 30

then accumulated dep value 30.

After that calculate FA value 70...

Both account will be maintain end of the years...

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