a pvt ltd company sold building for 3200000 . the wdv of building is 1575125. what will be account entry in books of company.
10 Replies
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 24 June 2011
Entry on Net Basis
Bank ac dr 3200000
To Building 1575125
to profit on sale 1624875
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 24 June 2011
| Originally posted by : sivaram | ||
 |
Entry on Net Basis Bank ac dr 3200000 To Building 1575125 to profit on sale 1624875 |
 |
agreed
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 24 June 2011
| Originally posted by : sivaram | ||
|
Entry on Net Basis Bank ac dr 3200000 To Building 1575125 to profit on sale 1624875 |
|
for accounting treatment it is correct
jaganathan
(accounts executive)
(272 Points)
Replied 24 June 2011
| Originally posted by : sivaram | ||
|
|
Entry on Net Basis Bank ac dr 3200000 To Building 1575125 to profit on sale 1624875 |
|
Yes agreed with Mr.Sivaraman
Rockstar D
(Student CA FINAL)
(74 Points)
Replied 24 June 2011
The above entry is correct and for tax purpose it will be treated as STCG so keep it in mind.
Aparna Raja K.C
(Student)
(520 Points)
Replied 24 June 2011
Agree with Sivaram :)
@ Deepti :- But why will it be STGC?? How did you get the clue that the building was of short term?
Pulkesh Mehta
(Chartered Accountant)
(243 Points)
Replied 24 June 2011
Aparna Raja K.C,if on sale of depreciable assets,if capital gain arises,than itis always treated as STCG
Deepti is right
suresh
(article)
(247 Points)
Replied 26 June 2011
the entry should be made in the books as follows
Bank ac dr 3200000
To Building 1575125
to profit on sale 1624875
and short term gain on sale of assets chargeable to tax.
Anvesh Desai
(Chartered Accountant)
(156 Points)
Replied 26 June 2011
i absolutely agree with Sivaram..its a simple one..
however w.r.t answer tht Pulkesh Mehta gave, I would say tht Pulkesh is right in case where Sec 50 of
the Income Tax Act is applicable i.e. the WDV of the block of an asset is zero inspite of actual existance of an asset OR there is zero asset in the block inspite of existing WDV balance...
hence STCG in case of depreciable assets would be applicable only when situations depicted u/s 50 come into play..
If that is not the case then normal provisions of capital gains shall be applicable and STCG/LTCG shall be decided accordingly...
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