P&l appropriation iod
This query is : Resolved
29 May 2021
sir where does interest on drawings goes i.e. whether to p&L or p&l appropriation a/c.......morever how can a partner give loan to partnership or receive rent from partnership for use of his land by paertnership as partnership is not a separate legal entity. so partner and partnership is one and the same.. so how can one given loan/or rent to himelf.
29 May 2021
It goes to p and l appropriation.
For the purpose of income tax patner and partnership firm is different entitity having separate PAN and filing of separate ITR and paying taxes required.
Hence patner can give loan and receive Rent.
For the purpose of income tax patner and partnership firm is different entitity having separate PAN and filing of separate ITR and paying taxes required.
Hence patner can give loan and receive Rent.
30 May 2021
Sir why it does to p&l appro could you plz specify reason
30 May 2021
30% tax payable by the firm if taken to p and l.
30 May 2021
Sir isn't it because if it would have been taken un p&l it would be income of partnership firm which shouldn't be as partners and partnership firm are not separate legal entity which would create trouble...is this correct what I am thinking
30 May 2021
No, you are not right. It's only tax avoidance.
30 May 2021
sir as you said when we withdraw goods from business we record it at cost and cost includes expense attributable to acquire that good.. so for eg. purchased 10 tv for 1000 each and spent wages on it 1000. withdrew 2 tv set for home. so drawings will be 2200 as you said.. but if we record this withdrawal of goods during accounting period, we debit drawings and credit purchase.. so purchase include only purchase price i.e. 2000 for 2 tv sets and doesn't include cost attributable to acquire to it. so when entry is passed during accounting period it will be drawings ac debit 2000 to purchase a credit 2000. so now expense attributable to acquire it which should now after drawings be attributable to owner will now be expense for business..and is completely opposite to what you said above.. and defeats business entity concept .this can happen for goods lost by fire whose accounting treatment is done during accounting period..plz explain???it is urgent and humble request to you to reply soon!!! thank you
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