Two brothers were doing partnership business, last year 1 brother took over the business independently.
will the opening stock be converted to purchases, what would be the effect regarding VAT setoff?
2 Replies
guru santhanam
(Chartered Accountant)
(97 Points)
Replied 16 June 2008
Hi Sudha,
As per my opinion, Opening Stock will not be treated as purchases. Because, whatever he brings in is capital. So, Capital A/c entry to be passed.
Since he brings stock. Entry should be...
Stock A/c Dr.
Capital A/c Cr.
I hope VAT set off can be made. Since he had invested the stock (which is similar to purchase)....i am not sure..
Regards,
guru
Sudha
(Articled Clerk)
(23 Points)
Replied 18 June 2008
Dear Guru,
The thing is entire business is takenover including stock and other assets and liabilities and there was vat receivable in the assets side of last years audited balance sheet.
so what will be the effect in VAT audit report this year regarding VAT output.
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