Harshita (CA FINAL STUDENT) (116 Points)
15 May 2012IF WE HAVE SHOWN LAND AS FIXED ASSETS IN PREVIOUS BALANCE SHEET AND THEN IN NEXT YEAR SELLING OUT THAT LAND IN 70-80 PLOTS , AND HAVING SOME PLOTS IN STOCK AT NEXT BALANCE SHEET.. THEN WHAT WILL BE THE ACCOUNTING TREATMENT.. WHETHER WE HAVE TO CONERT IT AS STOCK IN TRADE OR WHAT ELSE WE CA DO??
Rounak
(CA)
(75 Points)
Replied 15 May 2012
Rate of one plot X(multiply) no. of plots unsold = xxxx this amount should be shown in balance sheet under the name of land.
you can not say it is stock if the person do not sell land in ordinary course of business. this is a case in which we are selling our asset in parts. didn't you remember questions where we sell a part of machine and remaining machine carry on in balance sheet. .
Satya Mishra
(CA FINAL)
(105 Points)
Replied 15 May 2012
Agree with above reply. Its Jus as sell of Fixed Asset.
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