GOODWILL
This query is : Resolved
05 January 2011
DEAR SIR,
I AM HAVING A PROPRIETORY CONCERN SINCE LST FIVE YEARS HAVING TAX AUDIT. NOW I WANT TO TAKE ONE PARTNER AND MAKE MY FIRM A PARTNERSHIP FIRM. I WANT NEW PARTNER TO INTRODUCE RS. 10 LACS AS CAPITAL AND RS.4 LACS TOWARDS MY FIRM'S FIVE YEAR'S GOODWILL. IN SHORT, HE HAS TO PAY ME 4 LACS TOWARDS MY BUSINESS'S GOODWILL.HE IS READY FOR THIS.
SO, HOW WILL I MAKE THESE TWO ENTRIES IN THE BOOKS OF PARTNERSHIP FIRM ? ALL 14 LACS AS HIS CAPITAL OR 10 LACS ONLY / THEN WHAT ABOUNT THE ENTRY OF 4 LACS TOWARDS GOODWILL ? IN SHORT, HIS CAPITAL A/C SHOULD SHOW ONLY 10 LACS ONLY.
THANKS IN ADVANCE.
ANCKOORA.
I AM HAVING A PROPRIETORY CONCERN SINCE LST FIVE YEARS HAVING TAX AUDIT. NOW I WANT TO TAKE ONE PARTNER AND MAKE MY FIRM A PARTNERSHIP FIRM. I WANT NEW PARTNER TO INTRODUCE RS. 10 LACS AS CAPITAL AND RS.4 LACS TOWARDS MY FIRM'S FIVE YEAR'S GOODWILL. IN SHORT, HE HAS TO PAY ME 4 LACS TOWARDS MY BUSINESS'S GOODWILL.HE IS READY FOR THIS.
SO, HOW WILL I MAKE THESE TWO ENTRIES IN THE BOOKS OF PARTNERSHIP FIRM ? ALL 14 LACS AS HIS CAPITAL OR 10 LACS ONLY / THEN WHAT ABOUNT THE ENTRY OF 4 LACS TOWARDS GOODWILL ? IN SHORT, HIS CAPITAL A/C SHOULD SHOW ONLY 10 LACS ONLY.
THANKS IN ADVANCE.
ANCKOORA.
05 January 2011
NO tax liability
06 January 2011
dear sir,
I want to know how accounting entries are to be made in books for 10 lacs as well as 4 lacs .
thanks
I want to know how accounting entries are to be made in books for 10 lacs as well as 4 lacs .
thanks
06 January 2011
Cash A/c Dr. 14 Lakhs
To Premium for Goodwill 4 Lakhs
To New partner capital A/c 10 Lakhs
Premium of Goodwill Dr.
To A's(old partner) capital
(if cash remains in business)
To Premium for Goodwill 4 Lakhs
To New partner capital A/c 10 Lakhs
Premium of Goodwill Dr.
To A's(old partner) capital
(if cash remains in business)
06 January 2011
dear sir,
will this 4 lacs received as Premium for Goodwill will be taxed ? is it taxable income of the firm ?
thanks
will this 4 lacs received as Premium for Goodwill will be taxed ? is it taxable income of the firm ?
thanks
06 January 2011
No not taxable, better receive this 4 lakhs privately , i.e. without passing any entry thought books of firm and just pass one entry,
Cash A/c Dr. 10
To New partner capital A/c 10 Lakhs
Cash A/c Dr. 10
To New partner capital A/c 10 Lakhs
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