chit fund investment entry

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This query is : Resolved

ravi (Querist)

03 August 2008
Tell me the accounting entry required for invetsment in a chit fund company like SRi ram chits fund ,from the company point of view?

company name = X ltd.
Nature of deposit/advance = in cash/bank

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

04 August 2008 Chit Fund with Sri Ram Chits Fund Dr.
To Bank/Cash
To Dividend on Chit(In case payment is
net of Dividend)

In case no dividend is available then the entry for dividend may be ignored.

Message likes : 2 times

ravi

ravi (Querist)

04 August 2008 Thanks for the information.
Apart from this investment that company may receive some advance money from that sri ram chits . for that advance x ltd may need to pay EMI's on the basis of that advance/loan

Waiting for the solution

Thanks,
Ravi

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

04 August 2008 Amount received against Chit auctioned in ur favour may be credited to the chit fund company. Entries in this regard will be as per under;

Entry for auction money after the discount and Foreman Commission:

Bank Dr
Loss on chit fund
To Sri Ram Chit Fund

Subsequent Monthly payment:

Sri Ram Chit Fund
To Bank
To Dividend

ravi

ravi (Querist)

04 August 2008 Thanks for the information.

can you explain whats this dividend. is it like apportion of loss on chit fund among the remaining period of time?

Thanks,

Ravi

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

05 August 2008 It is the profit which will accrue to you on month to month basis on the auction of a chit.

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