Land investment

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rakhib (Querist)
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23 May 2017 A company has introduced capital in the form of Land in a partnership firm. If value of the land is rs7000 in company books but invested at a value of rs10000, what will be the entry in company books?. Kindly help me in this issue.

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CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)
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24 May 2017 In the situation you have stated, the land has to be debited and the capital has to the credited. In the company books you have to consider the value at which the investment was made i.,e Rs.10000

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rakhib

rakhib (Querist)
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24 May 2017 I think the entry what you have mentioned is in the books of partnership firm. I wanted to know the entry in company books.

rakhib

rakhib (Querist)
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24 May 2017 I think the entry what you have mentioned is in the books of partnership firm. I wanted to know the entry in company books.

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)
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24 May 2017 I think I am a little confused here. How can both entities (partnership firm & Company) show the same land in their books? Are you referring to any sham company? You have already mentioned that the land is shown in the Company's book and the entry remains the same as suggested.

rakhib

rakhib (Querist)
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24 May 2017 Company is a partner in the partnership firm. The company as a partner introduced capital in the form of land. Value of land in books of company is rs7000, but invested at rs10000 in the partnership firm. Hope you are clear :)