Dear All,
Can any body guide me how will be the accounting entry to be passed in the books of a Pvt. Ltd. company having partner in a Partnership Firm and received share in profit.
Should Pvt. Ltd. company required to get tax audit done in case share in profit from Partnership Firm is more than 1 CR..
Thanks
CA Dharmendra Bansal
Solution for the below two questions raised by you
1) The entry for the receipt of profit from Partnership firm in the books of company would be
XXX (Partner ship firm) A/c Dr
To share of profit
2) As per section 44 AB of the IT Act, 1961 Tax Audit for Assessee is required only if the Gross turnover of the company exceeds 1 Cr. But for your information Turnover does not include other income. Share of profit is to be considered to be other income.
Hope your two questions are solved
Sanjay sir
is this the due entry u have told ?
we will also pass
Bank
to XXX partnership firm
am I right sir
shivani
obviously, the subsequent entry would be the one what you said
As far as the Company is concerned, the amount of capital in the firm is it's investment.
So if the firm makes profit, the company should show it as an increase in its investment.
So Debit Investment. Credit Profit share.
Pls correct me if I am wrong.
Please correct me if I m wrong......
The question itself is a mess
A pvt ltd co can not become partner in a firm due to its distinct character of Limited Liability
As we all know partners are indefinitely liable.
It will be valid when a company does an investment and becomes a partner in a LLP firm.
The Company should disclose two investments:
1. Non current: Representing the fixed capital in the LLP
2. Current: Current capital in the LLP firm which has all your salary/interest/profit adjustments.
Company's share in the LLP's profit or loss will hence be adjusted against its current investment in the LLP firm
sir what is the entry in tally for if A,B,C are partners they are shared a profit
CAclubindia
