The purchase of fixed assets that need to be installed is accounted for in the book

Hello! After the VAT reform on January 1, 2009, the input tax on the purchase of production and operating equipment can be deducted, and does not need to be included in the initial value of fixed assets. Transfer directly to the cost of the equipment (as in the case of raw materials used in production) at book value.

The installation of fixed assets is recorded when it reaches the intended state of use. According to the accounting method, it is December 31. The recorded value is the fixed capital purchase price plus the installation and commissioning fees and period costs + non-deductible VAT, a fixed asset purchase to the use of scrap when he can not have nothing, after scrapping ** he also has a residual value, so the account must be full price.

Depreciation must be the value of the equipment you actually use.

The accounting entries for the purchase of fixed assets that need to be installed are as follows:

1. Purchase fixed assets.

Borrow: Construction in progress.

Credit: Tax Payable – VAT Payable (Input Tax) Payable

Bank deposits. 2. Pay the installation fee.

Borrow: Construction in progress.

Credit: Bank deposits.

3. The project is completed.

Borrow: Fixed assets.

Credit: Construction in progress.

Precautions: 1. The original value of fixed assets, that is, the recorded value of the construction in progress when purchasing fixed assets, includes the purchase price, packaging cost and transportation cost of fixed assets;

2. The raw materials used in the installation of fixed assets do not need to be subject to the input tax of VAT, because this part of the cost has been included in the purchase of fixed assets. ‍

Let me tell you clearly: the recorded value is 840,000 + 160,000 = 1,000,000, and the accounting time is December 31, as for the recorded value "plus the estimated net residual value", pure nonsense!

When purchasing fixed assets that need to be installed, the ** plus the installation fee and the accessories used at the time of purchase are all recorded values.

The fixed assets that need to be installed are first recorded in the account of "construction in progress".

If it is a general taxpayer who involves the deduction of VAT input tax, then when purchasing fixed assets that need to be installed. According to the fixed assets delivery and use schedule, as the accounting voucher, and then transferred to the "fixed assets" account.

When purchasing fixed assets that need to be installed, the installation and commissioning costs shall be included in the cost of fixed assets. First, the cost is collected through the "Construction in Progress" account, and then transferred from the "Construction in Progress" account to the "Fixed Assets" account when it reaches the intended usable state.

The accounting entries are as follows:

Purchase of fixed assets that need to be installed. Borrow: Construction in progress. Credit: Tax Payable – VAT Payable (Input Tax) Payable

Bank deposits. Pay the setup fee. Borrow: Construction in progress. Credit: Bank deposits.

After the completion of the project, it is transferred to fixed assets. Borrow: Fixed assets. Credit: Construction in progress.

The second situation: self-built fixed assets, (not outsourced, self-built that is, self-operated projects). Here it is necessary to use the "Engineering Materials" accounting account to account for the purchased engineering materials. The relationship between "construction materials", "construction in progress" and "fixed assets" is as follows:

The specific accounting entries are as follows:

When purchasing engineering materials Liang Pei: borrowing: engineering materials, tax payable - VAT payable (input tax).

Credit: Bank Deposits, Receipt of Construction Materials: Borrow: Construction in Progress; Credit: Engineering Materials.

Payment of Other Construction Costs: Borrow: Construction in Progress; Credit: Bank deposits.

Wages and Benefits of Engineering Personnel: Borrow: Construction in Progress; Credit: Employee Compensation Payable.

When receiving the company's products: borrowing: projects under construction; Credit: Inventory of goods.

When receiving the materials purchased by the enterprise: borrowing: construction in progress; Credit: raw materials.

Fixed Asset Transferred After Project Completion: Borrow: Fixed Asset; Credit: Construction in progress.

Answer]: CCorrect Answer]: C

Answer analysis]: The value of the fixed assets that need to be installed in the purchase of the company should be included in the construction in progress account first, and then transferred to the "fixed assets" section after the installation is completed.

In order to meet the needs of their own production and operation, enterprises will purchase many fixed assets, some need to be installed, some do not need to be installed, so what should be done to purchase the fixed belt filial piety assets that need to be installed?

Accounting entries for the purchase of fixed assets that need to be installed.

At the time of purchase: borrowed: construction in progress.

Tax Payable – VAT payable (input tax).

Credit: bank deposits, accounts payable, etc.

When the intended usable state is reached:

Borrow: Fixed assets.

Credit: Construction in progress.

What is included in the recorded value of fixed assets that need to be installed?

It includes the purchase price, relevant taxes and fees (including but not limited to: customs duties, deed tax, cultivated land occupation tax, vehicle acquisition tax), transportation costs, loading and unloading costs, installation costs and professional service fees attributable to the fixed assets before they reach the expected usable state.

What is a construction in progress?

Construction in progress" accounts for the value of construction projects such as infrastructure construction and technological transformation. The debit balance at the end of the period reflects the value of the unfinished construction in progress of the enterprise.

Similarly, the daily repair costs, major repair costs, renovation expenses, and house decoration expenses incurred in the "construction in progress" account are also accounted for, which meet the conditions for the recognition of fixed assets stipulated in the fixed assets standard.

It should be noted that if the conditions for the recognition of fixed assets are not met, they should be accounted for in the "management expenses" account, not in the "construction in progress" account.

The "construction in progress" account shall be calculated in detail according to the detailed accounts set up for "construction projects", "expenses to be amortized", "installation projects", etc. If the construction in progress is impaired, the "impairment provision" line account should be set up in this account for accounting.