ASIF ALI MEMON (8 Points)
03 August 2021Roof false ceilings get done in office of 175,000 please guide the accounts entry either record in expenses or assets
prasad Nilugal
(3914 Points)
Replied 03 August 2021
1) If office Building is old then you have expense out Roof Ceiling expense so entry will be
Roof Ceiling Expense A/c Dr 175000/-
To Trade Creditors A/c Cr 175000/-
( Booking of roof ceiling expense )
expense will be under indirect expense Profit & Loss Account
When you make payment
Trade Creditors A/c Dr 175000/-
To Bank A/c Cr 175000/-
( Payment of an expense )
2) If office Building is new then you have to add roof ceiling expense in cost of an Asset
( Cost of an asset + Roof ceiling expense ) = Total value of an asset
Entry will be
Asset A/c Dr
To Trade Creditors A/c Cr
( purchase of an Asset )
payment entry
Trade Creditors A/c Dr
To Bank A/c Cr
( Payment made )
please reply your office Building is new or old ?.
prasad Nilugal
(3914 Points)
Replied 03 August 2021
prasad Nilugal
(3914 Points)
Replied 03 August 2021
Even if office building is new , its not an asset in your books of accounts , same is on rent and therefore you have to show an expense .
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 21 September 2022
Nothing to worry about. If your renting it, it's always an indirect expense as you don't own that building asset even though it is useful for production but not directly.
CAclubindia
