How would this adj be treated ?
Bad debts recovered amt to rs.50000 whc belongs to sales made pre incorporation, has been deducted from bad debts
Bad debts =rs. 100,000( p&l a/c )
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Pre and post incorporation profit
Replies (8)
Bad debts should proportionate in sales ratio in pre&post incorporation.
and Bad debts recovered should show in pre- incorporation.
and Bad debts recovered should show in pre- incorporation.
not understand plese give an example
1. Bad debts recovered amount is Income. Bad debts (loss) was debited to profit and loss a/c during pre-incorporation period.
So Bad debts recovered to be consider as Pre-incorporation Income.
2. Bad debts is the loss which are directly related with sales. so this loss is to be apportioned to pre and post incorporation period in sales ratio.
How to treat income in Pre and Post incorporation like intrest on investments or any income
WHAT IS COST OF ASSETS, THE PRICE OF PURCHASE ASSETS WITH ALL EXPENSES UP TO START USE BUT IF RECEIVED THE A SEPARATE INVOICE OF EXPENSES OF DURING THE PURCHASED ASSETS SO HOW CAN WE CREATE ENTRY THEN WE CAN SEE THE COST OF ASSETS.
All such expenses are debited to Asset account only even with different invoices or without documentation.
How do we treat provision for bad debts in pre and post incorporation ??
There is no treatment for pre. Only post incorporation accounting is available. However by using accoubting conventions, you can transfer a pro ision from pre to post
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