My company opened a cafe. We have asked a builder to put in a new kitchen, purchased new coffee machine and essentials .
cost of put in a new kitchen : 10000 - Capital
new flooring :1500 - Capital
coffee machine :2000 - Capital
installation for coffee machine:500 - capitalise as part of the cost of the new coffee machine. Purchase of the coffee machine should include all costs incurred in bringing it to the condition and location for service so the cost was £2500, not £2000
Till : 500 - Capitalise
Table and chairs :450 - Capitalise
plates :200 - Revenue (there is an arguement to say capitalise (borderline materialarity) but the wastage is such that plates should not be considered long term assets)
Cutlery :100 - Revenue (The cost is immaterial)
Welcome doormat :10 - Revenue (the cost is very immaterial)
etc - Nope, no etc. where's the rest
Thank you for help!
No probs
Hi Grace,
Answers embedded above,
kind regards,
Shaun
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
plates :200 - Revenue (there is an arguement to say capitalise (borderline materialarity) but the wastage is such that plates should not be considered long term assets)
I agree with Shaun and would include plates as revenue expend given the breakages position. Although I reckon some of these Michelin starred restaurants must capitalise when they use £200 plates to serve their food ( as well as Sack their staff when they drop one!)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
