Muhammad Arshad Ashrafi (Accountant) (189 Points)
10 May 2011Dear Sir/Madam
please suggess me
if X pay as advance 1Lac cash & 5Lac a/c payee cheque to Y on 04.4.11 for purchasing the shop, after 1 month X will be pay balance amount 5Lac to Y on Registration of purchase. how can i pass entry in a/c .
please clear it with A/c under head mean fixed assest or investment
Thank to all of you those who read and answer my query
Arshad
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 10 May 2011
it would go in "fixed assets" as it would be shop and on which the assesee will do some business.
all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved)
once the business get started, he will be entitled to avail depreciation from business profit.
Muhammad Arshad Ashrafi
(Accountant)
(189 Points)
Replied 10 May 2011
| Originally posted by : U S Sharma | ||
 |
it would go in "fixed assets" as it would be shop and on which the assesee will do some business. all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved) once the business get started, he will be entitled to avail depreciation from business profit. |
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Dear Sir
Please clear this also "avail depreciation from business profit."
Thanks a lot
Arshad
Muhammad Arshad Ashrafi
(Accountant)
(189 Points)
Replied 11 May 2011
| Originally posted by : RADHEKRISHNA0001 | ||
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y a/c - - -- - - - - - dr.600000 to cash 100000 to bank500000 (being advance for asset purchase given) after i month asset a/c --- - - - - - - - -- dr.1100000 to y 600000 to bank500000 it will go under fixed asset |
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Dear Sir
can we take y a/c as under loan & advance a/c.
thanks
arshad
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 11 May 2011
1) its a Fixed asset ( commercial)
2) is going to be purchased
3) it would be commercial property ( shop)
a) if we look from the view of capital gains, then on very 1st transaction you have to take the payment made to fixed asset, as on the agreement also this date is mentioned that you have tendered the amount such date, which is effective date of property in existance with you, in near future if u sell off the property then 1st payment date would be considered as your date of aquisition.
b) as the shop you are going to purchase, means you have to do some business with it, or within it, or rent it. if you put it on rent, then 30% deduction of rent is available to you u/s 24, if you do business with this property then yearly value depriciation is available to you @ 10% (i.e. your taxable business profit will get reduced by 10% due to depriciation)
c) if you wish to buy and sell the shop in short term, then also we shall recomend you to put it in fixed asset, as capital gain would be available in "property" definition better way.
| Originally posted by : Muhammad Arshad Ashrafi | ||
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Originally posted by : RADHEKRISHNA0001 y a/c - - -- - - - - - dr.600000 to cash 100000 to bank500000 (being advance for asset purchase given) after i month asset a/c --- - - - - - - - -- dr.1100000 to y 600000 to bank500000 it will go under fixed asset Dear Sir can we take y a/c as under loan & advance a/c. thanks arshad |
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yes it is a advance for fixed asset purchase
Boss
(Full Farigh)
(31 Points)
Replied 12 May 2011
Dear Arshad,
As far as entries are concerned, RADHEKRISHNA0001 has correctly mentioned the same, provided the shop is purchased out of the business funds. under this case, shop has to be shown under fixed assets of the business. However, if the funds have newly been invested by the proprietor, then enteries would slightly be changed (which is assumed to be an unlikely situation).
Furthermore, besides the answer provided by the aforesaid member, instead of debiting Y's account, an account to be called as "Advance against shop" could have been opened, and the same would have been closed instead of Y's account.
On the basis of available information, the aforementioned suggestions could have been given.
Let me know, in case of any associated query.
Best Regards,
Boss.
Muhammad Arshad Ashrafi
(Accountant)
(189 Points)
Replied 22 July 2011
| Originally posted by : U S Sharma | ||
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1) its a Fixed asset ( commercial) 2) is going to be purchased 3) it would be commercial property ( shop) a) if we look from the view of capital gains, then on very 1st transaction you have to take the payment made to fixed asset, as on the agreement also this date is mentioned that you have tendered the amount such date, which is effective date of property in existance with you, in near future if u sell off the property then 1st payment date would be considered as your date of aquisition. b) as the shop you are going to purchase, means you have to do some business with it, or within it, or rent it. if you put it on rent, then 30% deduction of rent is available to you u/s 24, if you do business with this property then yearly value depriciation is available to you @ 10% (i.e. your taxable business profit will get reduced by 10% due to depriciation) c) if you wish to buy and sell the shop in short term, then also we shall recomend you to put it in fixed asset, as capital gain would be available in "property" definition better way. |
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Dear Sir
how can i make entry of cash payment to advocate of fee when registry the shop, we have no document of payment to advocate fee
Regards
Arshad
P V K
(Asst. Manager (Finance & Accounts))
(202 Points)
Replied 23 July 2011
Advance Payment
Y A/c Dr. 6,00,000 (Group under Sundry Creditors)
To Cash Cr. 1,00,000
To Bank Cr. 5,00,000
(Being advance towards Purchase of Building)
After Balance Payment
Building's A/c Dr. 11,00,000 (Group Under Fixed Asset)
To Y A/c Cr. 6,00,000
To Bank A/c Cr. 5,00,000
(Being Purchase of Building and enter the details like date of purchase etc. )
Muhammad Arshad Ashrafi
(Accountant)
(189 Points)
Replied 23 July 2011
| Originally posted by : Vinod | ||
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Advance Payment Y A/c Dr. 6,00,000 (Group under Sundry Creditors) To Cash Cr. 1,00,000 To Bank Cr. 5,00,000 (Being advance towards Purchase of Building) After Balance Payment Building's A/c Dr. 11,00,000 (Group Under Fixed Asset) To Y A/c Cr. 6,00,000 To Bank A/c Cr. 5,00,000 (Being Purchase of Building and enter the details like date of purchase etc. ) |
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thanks for reply please answer my below query,
Dear Sir
how can i make entry of cash payment to advocate of fee when registry the shop, we have no document of payment to advocate fee
Regards
Arshad
Paras
(Mcom,CA Final)
(122 Points)
Replied 24 July 2011
| Originally posted by : U S Sharma | ||
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it would go in "fixed assets" as it would be shop and on which the assesee will do some business. all payments would go to "fixed assets" including the registration fees, legal fees, brokerage ( documents have to get preserved) once the business get started, he will be entitled to avail depreciation from business profit. |
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Agreed !
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