Question

Pass the necessary journal entries for the following transactions on the dissolution of the firm of Sudha and Shiva after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account :

(i) Sudha agreed to pay off her husband's loan Rs. 19,000.

(ii) A debtor whose debt of Rs. 9,000 was written off in the books paid Rs. 7,500 in full settlement.

(iii) Shiva took over all investments at Rs. 13,300.

(iv) Sundry creditors Rs. 10,000 were paid at 9% discount

(v) Realisation expenses Rs. 3,400 were paid by Sudha for which she was allowed Rs 3,000.

(vi) Loss on realisation Rs. 9,400 was divided between Sudha and Shiva in 3 : 2 ratio.

Answer 1

JOURNAL

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Dr. (Rs.)}& \text{Cr. (Rs.)}\\ \text{(i)}& \text{Realisation A/c}& \text{Dr.}& & 19,000& \\ & \text{To Sudha's Capital A/c}& & & & 19,000\\ & \text{(Sudha's husband loan taken over by Sudha)}& & & & \\ \text{(ii)}& \text{Bank A/c}& \text{Dr.}& & 7,500& \\ & \text{To Realisation A/c}& & & & 7,500\\ & \text{(Debtors Realised)}& & & & \\ & & & & & \\ \text{(iii)}& \text{Shiva's Capital A/c}& \text{Dr.}& & 13,300& \\ & \text{To Realisation A/c}& & & & 13,300\\ & \text{(Investments taken over by Shiva)}& & & & \\ \text{(iv)}& \text{Realisation A/c}& & & 9,100& \\ & \text{To Bank A/c}& & & & 9,100\\ & \text{(Creditors for Rs. 10,000 paid at}9\%\text{discount)}& & & & \\ \text{(v)}& \text{Realisation A/c}& \text{Dr.}& & 3,000& \\ & \text{To Sudha's Capital A/c}& & & & 3,000\\ & \text{(Realisation expenses allowed to Sudha)}& & & & \\ \text{(vi)}& \text{Sudha's Capital A/c}& \text{Dr.}& & 5,640& \\ & \text{Shiva's Capital A/c}& \text{Dr.}& & 3,760& \\ & \text{To Realisation A/c}& & & & 9,400\\ & \text{(Loss on realisation transferred to partner's capital accounts)}& & & & \end{array}$