Treatment of goodwill in partnership accounts

ruchi lahoti

Adjust the profits of 2018-19 by adding back the cost of machinery and reducing the depreciation on such machinery. By charging it as revenue, our profit was understated. By adding back we can arrive at the correct profit.

Thread Starter

but purchase of machine is added as revenue it increases profit but purchase of machine is capital expenditure so for rectifying it we should decrease profit know?

Thread Starter

but purchase of machine is added as revenue it increases profit but purchase of machine is capital expenditure so for rectifying it we should decrease profit know?

Meda Jeevansai

Bro can you tell the page number of that illustration?

ruchi lahoti

Adjust the profits of 2018-19 by adding back the cost of machinery and reducing the depreciation on such machinery. By charging it as revenue, our profit was understated. By adding back we can arrive at the correct profit.

Sushma Verma

Nhi bro dekho hmne isey revenue expenditure mana h yani p&l reduce hua h na to profit yani kam h so we will add this to ascertain the correct profit

Meda Jeevansai

Mam, in adjustment they have already given that machine was depreciated. Then y we need to again reduce the profit ?

Meda Jeevansai

Plz reply sir/mam

ruchi lahoti

This depreciation is for the machine we had charged as revenue instead of capital expenditure