Question

A and B were partners in a firm sharing profits and losses equally. Their firm was dissolve on 15th March, 2014, which resulted in a loss of Rs. 30,000. On that date the capital account of A showed a credit balance of Rs. 20,000 and that of B a credit balance of Rs. 30,000. The cash account had a balance of Rs. 20,000.
You are required to pass the necessary journal entries for the:
(i) Transfer of loss to the capital accounts of the partners and
(ii) Making final payment to the partners.

Answer 1

JOURNAL ENTRIES

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Dr. (Rs)}& \text{Cr. (Rs)}\\ \text{2014}& & & & \\ \text{March 15}& \text{A's Capital A/c}\text{Dr.}& & 15,000& \\ & \text{B's Capital A/c}\text{Dr.}& & 15,000& \\ & \text{To Realisation A/c}& & & 30,000\\ & \text{(Transfer of loss on realisation)}& & & \\ & \underset{–}{}& & & \\ & \text{A's Capital A/c}\text{Dr.}& & 5,000& \\ & \text{B's Capital A/c}\text{Dr.}& & 15,000& \\ & \text{To Bank A/c}& & & 20,000\\ & \text{(Final payment made to partners)}& & & \end{array}$