(Fixed Assets) Motorcycles Purchased in Bulk with single Payment Accounting Entry

[zah493]

Hi

A new delivery business has purchased motorcycles in bulk i.e 200 by paying single lump sum amount, now how to record this transaction.

Dr Motorcycles (200)
Cr Bank

or something else and how to account for its depreciation.

thanks

 

[BIG E]

What type of business is this - a retail sale only, a rental of cycles, a sale and repair?

 

[zah493]

It is delivery business like Foodpanda, it has own app, through which customer order from variety of items and our rider will pick from the designated place and deliver to customer.

 

[BIG E]

I suggest to you based on each motorcycle being used for same purpose, that you keep an inventory list (like a subsidiary ledger) of EACH motorcycle, identify it with a unique number, so there's a tracking record of each cycle, and when sending out for a delivery, keep a record of which driver will be using it.
Yes - it will create a lot of work in tracking - but should a specific cycle go bad, maintenance records can trace the specific cycle's usage, who drove it, how well maintained it was etc. I realize that the insurance policy will be burdensome too.

 

[zah493]

Thanks for such clarification