How do I account for the return of capital stock to my company treasury, without any actual exchange of cash? The return was part of a business deal . My inclination is that I could use "other income"? Sure my expensive CPA will deal with it at year-end, but would like an idea beforehand of how something like this will be accounted for.
Stock liquidation
Aug 30, 2005
1 Replies
On Tue, 30 Aug 2005 04:37:12 GMT, in alt.accounting pete wrote in :
There's not enough information about the business deal to answer properly. Was the revenue part of the ongoing line of business or some sort of transfer of assets to an investor for stock? Was the capital stock returned at the value it had been booked at, or were there retained earnings associated with it?
If, for example, it is a trade of assets for stock, it may look something like:
Accumulated Depreciation $10,000.00 Capital Stock 40,000.00 Retained Earnings 10,000.00 Fixed Assets $50,000.00 Gain on Sale of Assets 10,000.00
There are many variations, depending on the circumstances. This is the kind of question that it's definitely worth talking to your accountant about -- particularly if there happen to be any tax consequences that you need to prepare for.
Join the Discussion
Have something to add? Share your thoughts — no account required.
Didn't find your answer?
Ask the community — no account required