Advance paid to Supplier...Entry kya hogi???

I think simple entry for purchasing a Fixed assets should be made in books of partnership firm & then entry for transfering of asset from firms books to the pvt co. books made on date of trf.

But it was not the asset of the p'shp firm.............

At the time of giving advance by firm, it should be treated as advance given to supplier by debiting advance a/c(with co's prefix)

transfer the advance to company at the time of conversion.

debit the asset & credit the advance in the books of company later on.

The pvt. ltd. company would take over all the assets and liabiities of firm. The advances to supplier would be part of the assets.

Post acquistion the company the entry would be past for purchase of assets.

Originally posted by : MANISHA SHARMA
	Hi frnz i have 1 query.......... There was a partnership firm who gt converted into a PVT. LTD. company in sept 2010. At the tym of partnership firm, this firm purchased a SIGNE BOARD for the private ltd company & paid some amount as ADVANCE to the supplier... 2 impt points to be considered while answering this query: 1) the Signe Board is an asset for the pvt ltd co. i.e. after/from sept'210 onwards. 2) there is no opening balance of SIGNE BOARD in pvt. ltd. co on 1st sept'2010   Now answer my ques   Q 1- Wat entry will be passed at the tym wen advance is being paid to supplier for the signe board.....   Q 2- On 1st sept, wat will be d adjustment entry for the advance paid earlier & at the same tym wat will b d entry for the fixed asset of signe board dat dis pvt ltd company has???   Kindly try to solve dis query of mine   Thanks & Regards.. Manisha Sharma

in firm a/c s

advance to suppliers a/c dr ..................

to 

cash /bank .......................................................................................

in balance sheet the advance to suppliers a/c will reflect in asset side

=================================================================

in pvt ltd co

asset (sign board) a/c dr. 

to advance to suppliers ........................................ ....................... ( neutralize the old entry)

to cash / bank  ........................................................( if any additional amount is payable for signboard)

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hope the sum is solved ...............

Agreed with U S Sharma