Sale of flat.
Querist : Anonymous
Flat a/c dr Rs.1500000
To Cash/bank a/c Rs.1500000
at the time of sale of first flat entry is date 1-5-2012
cash/bank a/c dr Rs. 2000000
To flat a/c Rs.1500000
To gain on sale of flat a/c Rs. 500000
at the time of purchase of second flat enter is date 1-5-2012
flat a/c dr Rs.2500000
To cash/bank a/c Rs.2500000
Grouping of above accounts. Flat grouped under Fixed assets and cash/bank a/c grouped under current assets and gain on sale of flat a/c grouped under indirect incomes and it should be showed at credit side of the p&l account at the time of preparation of final accounts.
Your balance sheet will effected as follows. At the time of purchase at the assets side fixed assets value increases by the value of purchase and cash/bank value decreases by the value of purchase as well as at the time of sale fixed assets value decreases by the book value of the asset sold and cash/bank value increases by the sale amount and profit and loss account increase by the gain on sale.
Note: in case such flat is held as depreciated asset then you have to consider the WDV value of of the flat at the time of sale and the difference between the WDV and sale value should be transfer to P&L account.
For any clarification post your doubt what you required clarification.
OM SAI SRI SAI JAI JAI SAI
Querist : Anonymous
OM SAI SRI SAI JAI JAI SAI
Querist : Anonymous
Thanks a ton you are really helpful.
OM SAI SRI SAI JAI JAI SAI
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