Question

Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:

1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs. 3,000.

2. Ashish, an old customer whose account for Rs. 1,000 was written-off as bad in the previous year, paid 60$\%$, of the amount.

3. Paras agreed to takeover the firm's goodwill (not recorded in the books of the firm), at a valuation of Rs. 30,000.

4. There was an old typewriter which had been written-off completely from the books. It was estimated to realise Rs. 400. It was taken away by Priya at an estimated price less 25$\%$.

5. There were 100 shares of Rs. 10 each in Star Limited acquired at a cost of Rs. 2,000 which had been written-off completely from the books.

These shares are valued @ Rs. 6 each and divided among the partners in their profit sharing ratio.

Answer 1

Journal Entries $\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Amt.(Dr.)}& \text{Amt. (Cr.)}\\ 1.& \text{Bank A/c}\text{Dr.}& & 3,000& \\ & \text{To Realisation A/c}& & & 3,000\\ & \underset{–}{\left(\text{Unrecorded furniture sold}\right)}& & & \\ 2.& \text{Bank A/c}\text{Dr.}& & 600& \\ & \text{To Realisation A/c}& & & 600\\ & \underset{–}{\left(\text{Bad debts previously written off now recovered 60}\%\right)}& & & \\ 3.& \text{Paras's Capital A/c}\text{Dr.}& & 30,000& \\ & \text{To Realisation A/c}& & & 30,000\\ & \underset{–}{\left(\text{Unrecorded goodwill taken over by a partner}\right)}& & & \\ 4.& \text{Priya's Capital A/c}\text{Dr.}& & 300& \\ & \text{To Realisation A/c}& & & 300\\ & \underset{–}{\left(\text{Unrecorded typewriter worth Rs. 400 taken over at 25\% less by Priya}\right)}& & & \\ 5.& \text{Parsa's Capital A/c}\text{Dr.}& & 300& \\ & \text{Priya's Capital A/c}\text{Dr.}& & 300& \\ & \text{To Realisation A/c}& & & 600\\ & (\text{100 shares of Rs. 10 each unrecorded in the books taken @ Rs.}& & & \\ & \text{6 each by Paras and Priya in their profit sharing ratio})& & & \end{array}$