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Conversion of personal assets into stock in trade
if a proprietor of jewellery shop convert his personally held asset (gold) into stock in trade at which cost it is to be recorded in books of firm - the price at which the proprietor purchase it or at the fair market rate??
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Quick Summary
At cost or net realisable value which is lower.
Stock in trade means the stock which is purchased in the business for resale purposes. Inventory valuations for it.
Sir if a owner of jewelery shop. introduce his personal gold of rs 10 lac ( purchase price) and ( fair market price is 50 lac) in his sole proprietor firm as a stock in trade at which value it is recorded?
thanks in advance
thanks in advance
10 lacs. The inventory valuations are same for sole proprietorship.
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