Sale of flat.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2013 I bought flat in year 2010 dtd (05.11.10) for Rs 15,00,000/- now in year 2012 dtd (01.05.12) I sold it for Rs 20,00,000/- & on a same day I buy new flat for Rs 25,00,000/- now my query is that how this all accounting entries how it will effect to my Balance sheet???

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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11 March 2013 At the time of purchase of first flat entry is date 5-11-2010

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

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Querist : Anonymous

Querist : Anonymous (Querist)

12 March 2013 Dear Tirumala can you please show Balance Sheet & P/L format in vertical for both year actually its little bit confusing...

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 March 2013 Please send your email ID i will mail you in excel format. Here no good presentation.

OM SAI SRI SAI JAI JAI SAI

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Querist : Anonymous

Querist : Anonymous (Querist)

12 March 2013 atul.mithbavkar@gmail.com

Thanks a ton you are really helpful.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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12 March 2013 I send the mail to you with the attachments required by you formats. Please find that and confirm me and ask is any doubts further.

OM SAI SRI SAI JAI JAI SAI

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