Dear All
A) Partnership firm named ABC earns a profit of Rs. 15000/- in 2010-2011 before claiming depreciation Rs. 7,45000/-.
Treatment done in books:- Profit credited to partner's capital account equally in their profit sharing ratio and unabsorbed depreacation was carried forwarded to next year Rs. 745000/-.
B) Same Partnership firm named ABC earns a profit of Rs. 1,50,000/- in 2011-2012 before claiming depreciation Rs. 5,85000/-.
Treatment done in books:- Last year unabsorbed deprecaition for Rs. 745000+this year dep. for Rs. 585000/- less profit of Rs. 1,50,000/-=11,80,000/- (LOSS) shared equally in their profit sharing ratio by partners..
Please comment on above situations. is the treatment given in books is correct?????
Also, comment as firm partners does'nt want to share the loss (due to unabsorbed dep) from their capital account by not adjusting the same and want to carry forward till next year
Thanks
Gaurav
CAclubindia
