Double Entry Question - Furniture purchase

Double Entry for Asset Purchase on credit plus depreciation

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VAT registered company purchases Furniture for £20,000 inclusive of VAT.

The invoice has been received but not yet paid. Depreciation policy is 10% straight line starting in the month of acquisition with a full month charge.

what would be the double entry for the receipt of invoice and then the accounts at end of month?

Replies (3)

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paddle steamer
By DJKL
19th Mar 2018 20:55

Presuming able to fully recover vat:

Dr Vat 3333.33
Dr Furniture 16666.67
Cr Creditors(PLCA) 20,000

Depreciation each month is then:

£16666.67/120months , so £138.89 per month

Do you deal with accounts as the answer for anyone that does is fairly obvious?

Thanks (2)
Replying to DJKL:
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By essex95
19th Mar 2018 21:04

Thanks, I work in HR but interviewing someone in our accounts tomorrow but our finance manager is off sick and I didn’t have the answer. You really helped.

Thanks (0)
Replying to essex95:
paddle steamer
By DJKL
19th Mar 2018 21:09

Well, if they cannot give you an answer do not employ them to deal with your books (well at least re vat and depreciation) .

It must be pretty tricky interviewing for a role outwith your own comfort zone, I do not envy you.

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