when transferor sold goods to transferee co,in case of amalgamation in nature of purchase, why the profit earned by seling those goods is transferrd to goodwill or capital reserve??.
please any one answer for this....
bharath t s (student) (34 Points)
12 December 2015when transferor sold goods to transferee co,in case of amalgamation in nature of purchase, why the profit earned by seling those goods is transferrd to goodwill or capital reserve??.
please any one answer for this....
Deepali
(CA Final Student)
(105 Points)
Replied 27 January 2016
When transferor that is selling company has sold goods to purchasing company, then in purchasing company's books it would have gone in stock. Which means that the profit element is also recorded. But once purchasing company has acquired selling company, the profit element should be removed
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