In daily operation, when an enterprise decorates a warehouse, its decoration fees should be included in the corresponding accounts according to the specific circumstances. How should specific accounting entries be prepared?
Accounting entry of decoration cost of warehouse
1. If the decoration cost of the warehouse is not large, it will be directly included in the "sales expense" and other accounts for accounting.
2. If the decoration cost of the warehouse is large, it will be included in the "Long term Deferred Expenses" account for accounting.
The accounting entries of the expenses incurred in the decoration of the enterprise's warehouse are as follows:
If the warehouse decoration cost of the production enterprise meets the definition of fixed assets, it will be recorded in the construction in progress and then transferred to the fixed assets, or the warehouse from financial leasing
Debit: construction in progress
Credit: bank deposit and other subjects
Debit: fixed assets
Credit: construction in progress
If the warehouse is leased from the enterprise's operating lease, it shall be included in the long-term deferred expenses according to the shorter of the lease term or the decoration service life:
Debit: long-term deferred expenses
Credit: bank deposit
Then the enterprise conducts amortization by stages:
Debit: management expenses
Credit: long-term deferred expenses
What is the long-term deferred expenses?
The long-term deferred expense account belongs to the asset account. Long term unamortized expenses refer to various expenses that have been paid by the enterprise but have an amortization period of more than one year (excluding one year). Specifically, it includes fixed asset repair expenses, improvement expenses of leased fixed assets and other unamortized expenses with an amortization period of more than one year.
What is the project under construction?
Construction in progress belongs to the asset category. Construction in progress refers to the construction expenditure of new construction, reconstruction and expansion of enterprise fixed assets, or technical transformation, equipment renewal and major repair projects that have not yet been completed. The detailed items include progress payment (advance payment), equipment, materials, three supplies and one leveling, civil engineering installation, interest expenditure, labor wages, land use rights, and other costs. Different enterprises can set it according to specific conditions.
How to make accounting entries for decoration funds
How to make accounting entries for decoration funds
If the house is owned:
Debit: fixed assets - decoration expenses; credit: construction in progress;
When the decoration expenses are separately depreciated: Debit: management expenses, Credit: accumulated depreciation.
If the house is leased:
Debit: long-term deferred expenses - improvement expenses of rented fixed assets; credit: bank deposits;
Amortization according to the lease term: Debit: management expenses, Credit: long-term deferred expenses - improvement expenses of leased fixed assets.
One of the following conditions shall be met when decoration costs are included in fixed assets:
1. More than 20% of the original price of fixed assets
2. The service life of fixed assets will be extended for more than years in the future
3. Change and add the use and function of fixed assets
If one of the above three conditions is not met, it shall be included in the long-term deferred expenses and apportioned within the lease term. If the office belongs to the fixed assets of the company, the amortization period of decoration expenses shall be 5 years in the "long-term deferred expenses".
If the office is leased by the company, the decoration fee shall be amortized according to the lease term. When the decoration cost is small, the lessee can record the cost of the current period in a lump sum; When the amount of expenses is large, it can be included in the prepaid expenses and amortized by stages. However, the amortization period cannot exceed one year. It can also be equally amortized within the lease term depending on the amount.
Accounting treatment can be carried out according to the actual situation of the enterprise. In case of expenses incurred during the opening period, they will also be included in the opening expenses once after the opening and amortized within five years.
Development materials:
An accounting entry is a record that indicates the debit and credit accounts and their amounts for an economic transaction. It is called an entry for short. An accounting entry consists of three elements: the direction of borrowing and lending, the name of the corresponding account (account), and the amount to be recorded. According to the number of accounts involved, it can be divided into simple accounting entries and composite accounting entries.
A simple accounting entry refers to an accounting entry that only involves one account debit and another account credit, that is, one debit and one credit; A compound accounting entry is an accounting entry consisting of two or more corresponding accounts, that is, one debit and multiple credits, one credit and multiple debits, or multiple debits and multiple credits.
How to make accounting entries for decoration expenses
1. If the amount is large, it will be amortized within the future maturity. When it is received, it will enter into long-term deferred expenses, which will be amortized in subsequent years, as follows:
Debit: long-term deferred expenses decoration expenses
Credit: bank deposit
2. Apportionment of long-term deferred expenses
Debit: management expense decoration expense
Credit: long-term deferred expenses decoration expenses
3. If it has been included in the construction in progress, carry forward
Debit: long-term deferred expenses decoration expenses
Credit: construction in progress
Accounting entries can be divided into simple entries and compound entries according to the number of accounts involved.
A simple entry refers to an accounting entry that only involves two accounts, that is, one debit and one credit;
A compound entry is an accounting entry involving two or more accounts.
Extended data Format of accounting entries
First: It should be first to borrow and then to lend. The debit and credit branches should have the debit first and the credit second;
Second, the credit bookkeeping symbol, account, and amount are all one space behind the debit, indicating that the debit is on the left and the credit is on the right.
There are two types of accounting entries: simple entry and compound entry. The simple entry is an entry with one debit and one credit; Compound entries are one debit and multiple credit entries, multi debit and multi credit entries, and multi debit and multi credit entries.
It should be pointed out that in order to keep the account correspondence clear, it is generally not appropriate to combine different economic businesses and prepare accounting entries with more debits and more credits. However, in some special cases, in order to reflect the full picture of economic business, accounting entries of more borrowing and more lending can also be prepared.
How to make accounting entries for the decoration expenses of rented factory buildings
1、 The decoration expenses of the factory leased by the enterprise shall be recorded into the "long-term deferred expenses", and then amortized averagely during the lease term.
1. When decoration costs occur:
Debit: long-term deferred expenses
Credit: bank deposit
Raw materials, taxes payable - VAT payable (input tax transferred out)
Payroll payable
2. At the time of average amortization according to the lease term
Debit: management expenses
Credit: long-term deferred expenses
2、 Interpretation
1. The "long-term deferred expenses" account is used to calculate the amortization period of the enterprise that has occurred but should be borne by the current and subsequent periods
Various expenses of more than years, such as improvement expenses of fixed assets rented by operating lease.
2. The fixed asset enterprises leased by operating lease only obtain the right of use and cannot be accounted for as their own fixed assets, nor can the decoration costs be capitalized into the cost of fixed assets.
The improvement expenditure of leased fixed assets incurred by the enterprise shall be debited to the "long-term deferred expenses" title and credited to the "bank deposit", "raw materials" and other titles. Amortization of long-term deferred expenses shall be debited to the "management expenses", "sales expenses" and other accounts, and credited to the "long-term deferred expenses" account.
