AA-19-Accounting Treatment for Conversion of Sole Proprietorship into Partnership

A/c entries 326 views 6 replies

All Respected members,

 

Please educate me if a sole proprietorship convert into a partnership firm and a coming partner is not investing anything but share of profit of both partners will be 50% each; how accounting treatment will be done at start ?

Further, supose that if some amount in sole proprietorship bank account and we transfer it to partnership bank account what will be accounting treatment for this as well ? 

Thanks in advance for your precious time and efforts to reply of this query. 

Replies (6)
All transfers from Proprietorship to Partnership can be account partner's capital (who is the proprietor of the old firm).
Dear Mr. Raja PM,

Thanks for your kind reply.

Can you please share the journal entry of this transfer ?

Further, let me know if proprietor transfer amount from their bank account to partnership account at the time of formation what would be journal entry of it ?

Dear Mr.Raja PM.

Your kind response awaited on above. 

Originally posted by : My Videos
Dear Mr.Raja PM.

Your kind response awaited on above. 

 

the partnership bank account is new one. right...?

Yes Sir. it's new one.
Originally posted by : My Videos
Yes Sir. it's new one.

Okay,

Provide the Following entries :

In Proprietor Account : 

Dr. XYZ company Capital A/c - XXXXX

To, Bank A/c - XXXXX

 

In Partnership Account :

Cr. Mr. A Capital A/c - XXXXX

Dr. Bank A/c - XXXXX

 

give proper narration in both end.


CCI Pro

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