Accounting treatment_urgent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2016 Mr. X is a partner in a Firm getting salary of Rs.60,000/- and interest on capital Rs.48,000/- p.a as per partnership deed.
Mr.X has also a proprietorship business.He wants to treat the salary & interest as follows:-
1. He wants to credit the salary & Interest of Firm in the PL a/c of his proprietorship business.
2.He wants to add the Salary & Interest of Firm in the Capital Account of his proprietorship business instead of crediting it in PL A/c of his proprietorship business.

In the partnership firm he has already added his Salary & Interest to his capital Account.

Whether any of the above two treatment above 1 & 2 is correct or Wrong?
Please give your expert advice.

Regards

Amol S Joglekar

Amol S Joglekar (Expert)
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16 September 2016 for Accounting : The choice is with the person....(Proprietor)
For income tax..... s/he needs to add the same under income from business

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2016 I am asking for accounting point of view. Please elaborate your answer,I could not follow what exactly you are explaining.

After adding Salary 60,000 & interest. 48000 to his capital in Partnership firm -
Option (i) can he add same salary 60000 & interest 48000 to capital of his proprietorship business?
Option(ii) can he give credit of same salary 60000 & interest 48000 in the PL a/c of proprietorship business?

Option(i) is correct
Option(ii) is correct
Option(i) and Option (ii) both are wrong.

Regards

Amol S Joglekar

Amol S Joglekar (Expert)
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17 September 2016 Assuming the proprietor Mr. X is carrying his proprietary business in the name of Jay Hind Sales & Services. Ok?
From accounting point of view, he has got 2 options for maintaining the books of accounts
Option A....books of accounts of firm + books of accounts of Jay hind Sales & Services + books of accounts of Mr X; individual....in all 3 sets
Option B..... books of accounts of firm + consolidated books of accounts of Jay Hind sales & Services AND Mr X; individual... in all 2 sets
In the light of above, the choice is with Mr. X whether to opt for option(i) or option (ii)
Your contention please.

Querist : Anonymous

Querist : Anonymous (Querist)

18 September 2016 Thanx for the suggestion.

Amol S Joglekar

Amol S Joglekar (Expert)
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18 September 2016 you are most welcome

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