Accounting treatment of stock taken by the partner

Dear suraj, partners capital account will be debited by the amount of stock  and the amount of cash taken over  by him,and final payment to be made to him shall be reduced by the same amount. As far as VAT return is concerned it will not be affected as the return is made for the firm as a whole and not for individual partners.

Dear Suraj, it should be treated as normal sale, by debiting the partner's capital A/c, and credit the Sales A/c

I agree with sumit

It  can be done by Crediting the Stock and Debiting the Partner's A/C.

Whatever value of stock or cash  the retiring or exisisting partner takes for himself from the firm, the same would be debited to his or her Partners Captial a/c. In some cases, capital account is kept intact and these transactions or shown in Partners Drawing account. And in balance sheet the net amount is shown.

The value of stock taken by a partner should be debited to his capital and credited to purchase account.

The VAT return of the Firm should include this as sale but since the sale is at the same value of purchase

which was subject to VAT at the point of purchase and since no value is added there will not be any liability

on the part of the Firm towards VAT.

V.GUNASEKAR,

CHITTOOR - AP.

Partner's Capital A/c    Dr

   To Purchase A/c                      

   To Cash A/c

above enry will be done if stock is taken by partner at cost.

If partner takes the stock at above cost, then sale a/c will be credited instead of purchase A/c.

whn a partner takes stock frm firm, his capital a/c shud b debitd in d partner's capital a/c of d firm wid d amnt of stock taken.it is because whn stock is taken,it decreases d capital balance of a partner who takes it and if the entire amt of capital is satisfied by the stock the there is no need to pay further cash.

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