Suraj (819 Points)
17 June 2012
My query is regarding the accounting treatment of stock taken by retiring partner.
There is a partnership between A, B & C. Till the date of retirement of B (say Oct 15, 2012), there was Op stock of, say, Rs. 800/-, purchases till date Rs. 1100/- and sales Rs. 1300/-. On retirement, B took stock worth of Rs. 450/- and some cash.
I wish to know how should be account for this stock taken by retiring partner? whether this will affect VAT returns of partnership firm?
saman
(student)
(61 Points)
Replied 17 June 2012
Lokesh
(CS professional)
(493 Points)
Replied 17 June 2012
Dear suraj, partners capital account will be debited by the amount of stock and the amount of cash taken over by him,and final payment to be made to him shall be reduced by the same amount. As far as VAT return is concerned it will not be affected as the return is made for the firm as a whole and not for individual partners.
CA sumit chejara
(ca final)
(99 Points)
Replied 17 June 2012
Dear Suraj, it should be treated as normal sale, by debiting the partner's capital A/c, and credit the Sales A/c
Janani Subramanian
(Employed)
(151 Points)
Replied 18 June 2012
It can be done by Crediting the Stock and Debiting the Partner's A/C.
work is worship
(Service)
(2728 Points)
Replied 18 June 2012
Whatever value of stock or cash the retiring or exisisting partner takes for himself from the firm, the same would be debited to his or her Partners Captial a/c. In some cases, capital account is kept intact and these transactions or shown in Partners Drawing account. And in balance sheet the net amount is shown.
Suraj
(819 Points)
Replied 18 June 2012
V.Gunasekar
(Chartered Accountant)
(27 Points)
Replied 18 June 2012
The value of stock taken by a partner should be debited to his capital and credited to purchase account.
The VAT return of the Firm should include this as sale but since the sale is at the same value of purchase
which was subject to VAT at the point of purchase and since no value is added there will not be any liability
on the part of the Firm towards VAT.
V.GUNASEKAR,
CHITTOOR - AP.
Arif Ali
(Apt Co Advisory)
(1230 Points)
Replied 17 September 2012
Partner's Capital A/c Dr
To Purchase A/c
To Cash A/c
above enry will be done if stock is taken by partner at cost.
If partner takes the stock at above cost, then sale a/c will be credited instead of purchase A/c.
sita
(tax consultant)
(21 Points)
Replied 15 October 2012
| Originally posted by : Arif Ali | ||
 |
My query is regarding the accounting treatment of stock taken by retiring partner. There is a partnership between A, B & C. Till the date of retirement of B (say Oct 15, 2012), there was Op stock of, say, Rs. 800/-, purchases till date Rs. 1100/- and sales Rs. 1300/- cl stock is worth Rs.400. On retirement, B took stock worth of Rs. 400/- and his capital balance is Rs.400, can he take the stock as compensation to the capital balance receivable by him at the time of retirement? |
|
Shravani
(employee)
(21 Points)
Replied 15 October 2012
whn a partner takes stock frm firm, his capital a/c shud b debitd in d partner's capital a/c of d firm wid d amnt of stock taken.it is because whn stock is taken,it decreases d capital balance of a partner who takes it and if the entire amt of capital is satisfied by the stock the there is no need to pay further cash.
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