if my draft net profit is 60000 rs before charging the below one entry then what will be effect of the entry on profit and what will be my profit.
repairs to machinery of rs 10000 was wrong capitalised to machinery account and thereon charged 20% depriciation
please reply
rectify if i am wrong
first of all my profit will go down by 10000 becouse i will charge 10000 to repairs
my entry will be
repairs to machinery a/c debit (nominal a/c)
To machinery account a/c
and then i will increase my profit by 2000 that i will credit to depriciation
a/c
please reply