Cost of land
This query is : Resolved
23 August 2020
Dear colleagues,
there was a land purchased in 2016. it was purchased out of loan and own contribution.
own contribution could not be debited to the land.
now in 2019, when it was sold, it was realised that land in books is at value lesser than purchase cost.
how can it be rectified in books of 2019-20?
plz reply soon
thanks
there was a land purchased in 2016. it was purchased out of loan and own contribution.
own contribution could not be debited to the land.
now in 2019, when it was sold, it was realised that land in books is at value lesser than purchase cost.
how can it be rectified in books of 2019-20?
plz reply soon
thanks
23 August 2020
Pass a journal Entry 01/04/2019 by debiting the Land and crediting the P&L Account with the amount of own contribution invested for purchase of Land.
24 August 2020
why should we credit the pl?
24 August 2020
How did you treat own contribution in 2016 ? Had you booked as revenue expenditure ?
24 August 2020
the entry for own contribution was missed in 2016
24 August 2020
How could you miss the entry ? Did you make payment in cash ???
24 August 2020
I was not the auditor in 2016. so i dont know about it. It was recognised when the treatment of sale of land was worked out.
24 August 2020
It is not possible to record it now.
24 August 2020
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