account entry of bac to back contract

Save Share

This query is : Resolved

Anil Kumar Kedia (Querist)

28 August 2008 My question is that : one main contractor firm A has taken a contract from Govt department and the A firm has awarded the same contract to ther sub-contactor firm B on the same terms & condition on a certaing percentage of margin. Accourding to this sub-contact agreement all taxes and durties is deducted by Govt department from the bill of main contractor firm A and firm A is reimbusing this taxes from Sub-contractor firm B . Then my quesstion is that : what accounting entry will be passed in the books of contractor firm A and subcontract firm B . My mean to say that subcontract will debit the taxes account or other account because if taxes account is debited but subcontract firm A has not paid directly to Govt . please clearify.

Taranjit Singh

Taranjit Singh (Expert)

06 October 2009 Hello, is this an old query still pending? You can send me a Pm if yes....I m trying to take all old pending queries in Accounting Forum......Thanx.

Taranjit Singh

Taranjit Singh (Expert)

06 October 2009 Hello, is this an old query still pending? You can send me a Pm if yes....I m trying to take all old pending queries in Accounting Forum......Thanx.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now