I am assigned tax audit of a client...An advertsing agency was bought by a party...Since they cudn pay off the entire money they made the owner of business(Y) a partner..They formed a partnership deed with 8 :2 ratio....X has to bring in 16 lac & Y has to bring in 4 lac .. X s contribution will be in form of Furniture Movables and Goodwill(that means not in money)..And no money is reflected in bank account...Y s contribution 4 lac is rightaway taken by X..thats also not reflected in books....X has physically added only 50 000 fixed asset..Can we take the closing values of the fixed assets of proprietor X as Ys contribution?
Then the entries will be Fixed Asset (Closing value of proprietor) A/c Dr
To X s Capital
and for taking away 400000 of Ys capital,
X capital Account 400000
To Y Capial Account 400000
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