dissolution of partnership firm

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2011 sir i want to know which accounts to be presented in the tax audit report in case of dissolution of firm. whether realisation account and cash account is to be presented ? since there are no balances in balance sheet how to present balance sheet as on the date of dissolution ? whether nil balance sheet to be presented ?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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03 July 2011 Tax Audit is applicable only when there is transaction above the limit of 60 lacs. If before the close of the year there is dissolution and all the partners have been paid their capital, all liabilities have been paid and assets are NIL then you have to give a Nil Balance Sheet and the best way is to show in the following manner

Partners Capital Account XXXXX
Less: Paid during the year XXXXX 0.00

Liabilities
Opening Balance XXXXX
Less: Repaid: XXXXX 0.00

Assets
Opening Balance XXXXX
Less: Realised XXXXX 0.00

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2011 sir why realisation account, cash account are not shown in the tax audit report and why nil balance sheet is shown instead of balance sheet upto the dissolution date ?
thanks in advance.

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