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Question

Pass necessary Journal entries for the following transactions on the dissolution of the firm P and Q after the various assets (other than cash)  and outside liabilities have been transferred to Realisation Account:
(a) Bank Loan ₹ 12,000 was paid.
(b) Stock worth ₹ 16,000 was taken over by partner Q.
(c) Partner P paid a creditor ₹ 4,000.
(d) An asset not appearing in the books of accounts realised ₹ 1,200.
(e) Expenses of realisation ₹ 2,000 were paid by partner Q.
(f) Profit on realisation ₹ 36,000 was distributed between P and Q in 5 : 4 ratio.


Solution

 

 

Journal

S.N.

Particulars

L.F.

Debits

Amount

Rs

Credit

Amount

Rs

(a)

Realisation A/c

Dr.

 

12,000

 

To Bank A/c

 

 

12,000

(Bank loan paid at the time of dissolution)      

 

 

 

 

 

 

 

(b)

Q’s Capital A/c

Dr.

 

16,000

 

To Realisation A/c

 

 

16,000

(Stock taken over by Q)

 

 

 

 

 

 

 

(c)

Realisation A/c

Dr.

 

4,000

 

To P’s Capital A/c

 

 

4,000

(Creditors paid by P)

 

 

 

 

 

 

 

(d)

Bank A/c

Dr.

 

1,200

 

To Realisation A/c

 

 

1,200

(Unrecorded assets realised)

 

 

 

 

 

 

 

(e)

Realisation A/c

Dr.

 

2,000

 

To Q’s Capital A/c

 

 

2,000

(Realisation expenses paid by Q)  

 

 

 

 

 

 

 

(f)

Realisation A/c

Dr.

 

36,000

 

To P’s Capital A/c

 

 

20,000

To Q’s Capital A/c

 

 

16,000

(Realisation Profit distributed )

 

 

 


Accountancy
TS Grewal Vol. I (2019)
All

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