Accounting for sale consideration otherwise than in cash

Save Share

This query is : Resolved

CA Shruti kuchhal (Querist)
Follow

28 January 2015 Dear Experts,

One of my client has got contract for supply of LED lights from one of customers for a real estate project.

The customer will be transferring the said real estate in name of my client as the consideration for supply of lights.

What will be the accounting treatment for the above transaction.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

28 January 2015 Pass journal entry.
Real estate ac dr
To sales ac cr

Pass entries on value adopted for stamp duty payment.

CA Shruti kuchhal

CA Shruti kuchhal (Querist)
Follow

28 January 2015 Thanx Seetharaman for early reply i was also thinking the same but would it be right treatment as the nature of the transactions is different sale is of revenue nature while real estate is off capital nature

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

28 January 2015 Yes it is a right treatment.

CA Shruti kuchhal

CA Shruti kuchhal (Querist)
Follow

28 January 2015 can u explain the logic behind the same

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

28 January 2015 Assume you received a cheque for supply of LED lights and Paid cheque for purchase of real estate.
Pass entries for the above. Bank entry will be squared off balance entry is only the journal entry already passed.

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