PROFIT TRANSFER

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 DEAR SIR
MY OWNER HAVE DIFF COMPINES. FROM THAT ONE OF THE CO NAME CALLED P.P.C. ASPER THEIR B/S AS ON 31/12/09 SHOWING THAT MY OWNER HAVE PROFIT RS.100,000/- AND THE SAME TIME MY OWNER IS PAYABLE TO THAT CO RS.50,000/-
ON 31/01/10 THEY TRF FROM PROFIT RS.50,000/- TO CLOSE THE PAYABLE(OWNER) AND 10,000/- THEY TRF TO CAPITAL FOR INCREASING THE CAPITAL. NOW MY OWNER HAVE PROFIT RS.40,000/- ONLY ASPER THEIR A/C.
NOW I WANT TO POST THIS ENTRY IN MY A/C. I AM WORKING AS HIS PERSONAL ACCOUNTANT. PLEASE GIVE ME THE JOURNAL ENTRY AND THIS I WANT TO POST UNDER EQUITY HEAD OR NOT.
PLEASE HELP ME.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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23 December 2010 For Loan - Debit P&L - Credit Loan receivable from Owner Rs. 50,000

Transfer to Capital - Debit P&L Account - Credit Owner's Capital Rs. 10,000

You can also transfer 60,000 to Capital and then transfer 50,000 to loan and will have the same effect.

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 sir i hope you give the entry for p.p.c co and they have to pass this entry
sir i am asking which entry i have to pass in my a/c. beacuse i am doing his personal a/c
he want to know at the end of the year how much profit he have from diff co.

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Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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23 December 2010 Does he have different limited companies or does he have proprietary firms (sole trading)?

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Querist : Anonymous

Querist : Anonymous (Querist)

24 December 2010 DEAR SIR
HE HAVE FOUR LIMITED CO, AND ONE SOLE TRADING CO.

Querist : Anonymous

Querist : Anonymous (Querist)

25 December 2010 sir
please give me the entry for the above problems because it is very urgent.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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26 December 2010 You cannot transfer profit from limited to company to the owner's books through journal entry.

You can only transfer funds from limited to company to the owner (share holder) through dividend.

The above entry can only be passed in sole trading companies books.

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Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2010 THANK U SIR
IF IT IS SOLE TRADING CO .WHAT IS THE ENTRY I HAVE TO PASS IN MY A/C.(OWNER'S BOOKS)

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Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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28 December 2010 In the owner's books:

Debit Investment in Firm (Capital). Credit Profit from Firm. Rs. 60,000

Debit Loan Payable to Firm. Credit Investment in the Firm (Capital) Rs. 50,000

Net effect existing loan due to Firm becomes zero. Investment in Firm (capital) increase by 10,000

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