What journal entry i need to make out ?

USA Discussion in 'General Accountancy Discussion' started by sanjay gupta, Jan 21, 2018.

  1. sanjay gupta

    sanjay gupta

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    Chart of Accounts



    Current Asset

    Property ABC

    Closing Amount 50,000

    Rehab Fix 50,000



    Partners Equity



    Partner XYZ Investment 50,000

    Partner ABC Investment 50,000





    Lets say when Property ABC gets sold, we have received 130,000$

    So How to record entry for 130,000 and also nullifying Asset and Partners Equity and recording profit for 30,000. What Journal entry, I need to make for this.



    Thanks
     
    sanjay gupta, Jan 21, 2018
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  2. sanjay gupta

    bklynboy VIP Member

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    Difference between sale price and asset sold is a gain. Not clear from your descriptions but I think its 130-50-50 = gain of 30 ( I assumed Closing Amount is original cost net of depreciation and Rehab Fix is capitalized improvements?). So now Asset has 130,000 Cash, there is 30,000 in the P&L 100,000 in Partners Equity. If you are then distributing the cash back to the partners that would be treated as a distribution unless you are liquidating the entity. Its not clear to me what "to nullify Partner Equity" means - what are you trying to do? Is this real or just an example?
     
    bklynboy, Jan 22, 2018
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  3. sanjay gupta

    sanjay gupta

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    Yes, Gain of 30 is perfect.
    Closing amount is net amount received which is 130,000 when we sold property.

    Nullify means when we sold it then we should not have asset so we need to make entry.
    Each partner is also given back their original investment and profit also.

    It is real, just numbers are changed to make it simpler.

    Thanks
     
    sanjay gupta, Jan 22, 2018
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