how to treat & record entries in the book for WIP (ie inventory) of a construction company given to a partner as settlement of his retirement claim on retirement , provided cost of wip given is more than retirement partners claim ???
plz. help.....
Virendra Gupta (Chartered Accountant) (25 Points)
06 December 2018how to treat & record entries in the book for WIP (ie inventory) of a construction company given to a partner as settlement of his retirement claim on retirement , provided cost of wip given is more than retirement partners claim ???
plz. help.....
Giridhar S Karandikar
(Team Lead)
(7543 Points)
Replied 06 December 2018
satish
(teaching)
(2046 Points)
Replied 07 December 2018
Virendra Gupta
(Chartered Accountant)
(25 Points)
Replied 07 December 2018
what about the difference in amount as i already mentioned the amt of WIP more than partners retirement claim.???
Virendra Gupta
(Chartered Accountant)
(25 Points)
Replied 07 December 2018
sir , construction companies do have WIP until there project is copleted . further no degree of completion is mentioned for wip , it can be that plots recorded as wip may have minor work left out , still they will be categorised as wip , as such 2 plots included in WIP have been given for retirement settlement claim.
further we have section 45(4) which talks only about capital asset , i found silence in law for wip/ inventory distributed , so the problem is if i record it as a part of sale , how should i account for the loss in the books on such transaction???
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