Hi all,

I have converted a Trading as into a CC, and want to sell the assets of the Trading as to the CC.

We need to notify Ministry of Finance about the “going concern” sale within 21 days, and they may then zero rate the VAT for the sales transaction. Both the trading as and CC is registered for VAT.

I have prepared the transactions for the “going concern sale”; can someone tell me if the entries are correct?

Going Concern Sale from T/A to CC

TRADING AS

DR – Creditors 40,000.00

CR – Debtors 300,000.00

CR – Motor Vehicles – NBV 267,000.00

CR – Bank 160,000.00

DR – Loan – CC 687,000.00

Net effect – going concern 727,000.00

The sales price will be the net amount of N$687,000

The sales price will not be paid cash, it will be handled through a loan account in the trading as and the CC

Motor Vehicles will be sold at NBV.

CLOSE CORPORATION

DR – Motor Vehicles – NBV 267,000.00

DR – Debtors 300,000.00

DR – Bank 160,000.00

CR – Creditors 40,000.00

CR – Loan – Trading As 687,000.00

Thank you

Juanita
Accountant: Tax and Inventory