Profit on Sale of Land
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 December 2010
We had purchased a land for erecting Factory building in FY 2007-08. Out of this land we sold some portion in current FY. The sale prise is more than the purchase prise. How to treat this gain in books? Pl help.
30 December 2010
In books pass the entry for Profit on sale of fixed Assets.
Bank A/c Dr. 100 (sale price)
To Land account 80 (cost)
to Profit on sale of FA a/c 20 (Profit)
Bank A/c Dr. 100 (sale price)
To Land account 80 (cost)
to Profit on sale of FA a/c 20 (Profit)
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Querist : Anonymous
Querist :
Anonymous
(Querist)
30 December 2010
Dear Zeeshan,
Thnks for the reply. U r correct. but i have a query about Acquired cost of Land means before to trf profit portion to income we should reevaluate the land cost considering RBI's NAV rate. M I right? Pl reply.
Thnaks
Thnks for the reply. U r correct. but i have a query about Acquired cost of Land means before to trf profit portion to income we should reevaluate the land cost considering RBI's NAV rate. M I right? Pl reply.
Thnaks
30 December 2010
As per my opinion, there is no need of revaluation for accounting purpose nor for IT computation purpose. You can proportionate the total cost of acquisition in the ratio of Area sold and area kept for use.
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