Fixed assets

***DR 211, 213 (COST)

1, Purchase and the FA is used immediately
Dr 211, 213: COST
Dr 1332
Cr 111, 112, 331
2, There is time needed before the FA is ready for use
Dr 2411, 2412: COST
Dr 1332
Cr 111, 112, 331
FA is ready for use: Dr 211 / Cr 2411, 2412
3, Purchase in deferred payment or in instalment
Dr 211, 213: COST
Dr 1332
Dr 242
Cr 111, 112, 331
Each month: Dr 635 / Cr 242
Dr 331 / Cr 112, 111 (payment in instalment)
4, Other cases
Dr 211, 213
Cr 711, 411, 154….
5, Funds (purchases / construction)
Dr Funds / Cr 411 (if the FA is used for business activities)
2 other cases (slide)
***CR 211, 213 (COST)
Dr 811, 222…
Dr 214: accu. dep.
Cr 211, 213: cost
***Depreciation
Dr 6xx
Cr 214: ???
Straight line method:
Dep. Charge = (Cost – Est. Residual value) / Est. useful life
Unit of production:
Cost = 100
Total capacity = 900,000,000 units
Jan, 2021, units of production = 500,000 units
Dep. Charge (Jan 2021) = 500,000 / 900,000,000 * 100
Declining balance:
Cost = 100
Dep. Rate = 20% per year
Dep. Charge (2021) = 100 * 20% = 20
=> Carrying amt = 80
Dep. Charge (2022) = 80 * 20% = 16
=> Carrying amt = 64
Dep. Charge (2023) = 64 * 20% = 12.8
***Repair & Maintenance
1, Frequent R&M: Dr 6xx / Cr…
2, Major R&M: Dr 2413
FA is ready for use:
Dr 211 / Cr 2413 (improve FA’s efficiency)
Dr 6xx / Cr 2413: 10b
Dr 242 / Cr 2413: 10b => Each year: Dr 6xx / Cr 242: 10/5yrs = 2b
Each year: Dr 6xx / Cr 3524: 2b => Dr 3524 / Cr 2413: 9b
Materials, tools and supplies
***DR 152, 153
1, Purchase (invoice  inventory receipt note )
Dr 152, 153
Dr 1331
Cr 111, 112, 331, 141…
2, Purchase (invoice  inventory receipt note )
save the invoice. At the end of month, if goods are still in transit,
then use acc 151
Dr 151
Dr 1331
Cr 111, 112, 331, 141
next month: receive in warehouse: Dr 152, 153 / Cr 151
3, Purchase (invoice  inventory receipt note )
Dr 152 / Cr 331 (no VAT!!)
when receiving invoice: adjust to correct entry
4, Other cases
Dr 152, 153
Cr 711, 411, 154…
***CR 152, 153
Dr 6xx
Cr 152, 153: ??? (FIFO, WA, …)
If cost of tools and supplies is allocated:
Dr 242: 100
Cr 153: 100
Each month: Dr 6xx / Cr 242: 5
***Trade discount and Settlement discount
***Periodic inventory system
Payroll
(334 – Payables to employees, 3382,3,4,6 - SHUI)
Employer:
- Salary payment to an employee: 12m – 1,26m = 10.74
- Payroll related compensations: based on Salary used to
calculate compulsory Insurance:
(1) Social Insurance: 17,5% ~ 8%
(2) Health Insurance: 3% ~ 1,5%
(3) Unemployment Insurance: 1% ~ 1%
(4) Trade Union Fee: 2% ~ 0%
Employer: 23,5% ~ Employee: 10,5%

1, Calculate Payables to employees:

Dr 641, 642, 627, 622: 12
Cr 334: 12
2, Payroll related compensations
2.1, Company’s exp (23,5%)
Dr 641, 642, 627, 622: 12 * 23,5%
Cr 3382: 12 * 2%
Cr 3383: 12 * 17,5%
Cr 3384: 12 * 3%
Cr 3386: 12 * 1%
2.2, Deduct from payables to employees (10,5%)
Dr 334: 12 * 10,5%
Cr 3383: 12 * 8%
Cr 3384: 12 * 1,5%
Cr 3386: 12 * 1%
2.3, Payment:
Dr 3383,4,6 / Cr 112
3, Make payment to employees:
Dr 334: 12 – 12 * 10,5%
Cr 112, 111
Sell…

1, Revenue
Sub: 100 => Cr 511
VAT: 10 => Cr 3331
Total: 110 => Dr 111, 112, 131…

2, COGS
Dr 632 / Cr 154, 155, 157

3, Revenue deduction
Dr 521
Dr 3331
Cr 111, 112, 131…

Dr 155 / Cr 632