Factory buildings are various houses directly used for production or supporting production. If an enterprise builds its own factory buildings, it is generally accounted through "construction in progress", "fixed assets" and other items. How to write specific accounting entries?
Accounting entries of self built factory buildings
During construction:
Debit: construction in progress
Tax payable - VAT payable (input tax)
Credit: bank deposit
When reaching the intended serviceable condition:
Debit: fixed assets
Credit: construction in progress
How to understand the construction in progress?
The construction in progress belongs to the asset category. The construction in progress refers to the construction expenditure of the new construction, reconstruction and expansion of the enterprise's fixed assets, or technical transformation, equipment renewal and major repair projects that have not been completed. There are usually two ways: "self support" and "outsourcing".
What are the main characteristics of fixed assets?
1. The value of fixed assets is generally large, the use time is long, and they can participate in the production process for a long time and repeatedly.
2. Although wear and tear occurs in the production process, it does not change its physical form, but gradually transfers its value to the product according to its wear and tear degree, and its value transfer part is recovered to form a depreciation fund.
As the monetary performance of fixed assets, fixed funds have the following characteristics:
1. The cycle period of fixed capital is relatively long. It does not depend on the production cycle of products, but on the service life of fixed assets.
2. Fixed capital value compensation and physical renewal are carried out separately. The former is gradually completed with the depreciation of fixed assets, and the latter is realized with the accumulated depreciation fund when fixed assets cannot be used or are not suitable for use.
3. When purchasing and constructing fixed assets, a considerable amount of monetary capital needs to be paid. This investment is one-time, but the recovery of the investment is carried out through the depreciation of fixed assets.
How to write accounting entries for transferring self built factory buildings to fixed assets
The accounting entries related to the transfer of self built factory buildings to fixed assets are as follows:
1. Materials purchased for the project:
Borrow: engineering materials.
Credit: bank deposit.
2. Project materials:
Debit: construction in progress plant.
Credit: engineering materials.
3. Surplus engineering materials converted to raw materials for enterprise production:
Debit: raw materials.
Taxes payable - VAT payable (input tax).
Credit: engineering materials.
4. Raw materials for production received by the project:
Debit: construction in progress plant.
Credit: raw materials.
Tax payable VAT payable (input tax transferred out).
5. Allocate the wages of engineering personnel:
Debit: construction in progress plant.
Credit: payroll payable.
6. Labor expenses provided by the auxiliary production workshop for the project:
Debit: construction in progress plant.
Credit: production cost auxiliary production cost.
7. The project reaches the expected serviceable condition and is delivered for use:
Debit: fixed assets.
Credit: construction in progress plant.
Accounting entry for construction plant of purchased engineering materials
1. The accounting entry of engineering materials purchased by the enterprise is:
Debit: engineering materials
Tax payable - VAT payable (input tax)
Credit: bank deposit
2. When engineering materials and manual construction of factory buildings are put into use, the accounting entries are as follows:
Debit: construction in progress
Credit: engineering materials
Payroll payable
3. The accounting entry of the plant completion carry forward is:
Debit: fixed assets
Credit: construction in progress
When an enterprise purchases engineering materials to build its own plant, it should account for the purchased engineering materials through the "engineering materials" account, and then account for the labor costs incurred by the enterprise in building the plant and the requisition of engineering materials through the "construction in progress" account, and account for the completed plant through the "fixed assets" account.
Is the self-produced products used for self built factory buildings regarded as sales? How to make entries?
Self built factory buildings belong to non taxable items. Therefore, the use of self produced or outsourced processing goods for non taxable items is regarded as sales
In terms of accounting items, the self produced and self used accounting entries should be:
Debit: construction in progress plant
Credit: finished products
Credit: tax payable - VAT payable (output tax)
Note that when the output tax is accrued, the sales price of similar products should be used as the basis, namely, cost transfer and sales price tax.
After completion of self built plant, transfer to fixed assets plant
