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 take over 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 realize 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

Books of Paras and Priya Journal
	Particulars			L.F.	Amount Rs	Amount Rs
1)	Bank A/c		Dr.		3,000
	To Realisation A/c					3,000
	(Unrecorded furniture sold)
2)	Bank A/c		Dr.		600
	To Realisation A/c					600
	(Bad Debt recovered which was previously written off as bad)
3)	Paras’s Capital A/c		Dr.		30,000
	To Realisation A/c					30,000
	(Unrecorded goodwill taken over by Paras)
4)	Priya’s Capital A/c		Dr.		300
	To Realisation A/c					300
	(Unrecorded Typewriter estimated Rs 400 taken over by Priya at 25% less price)
5)	Paras’s Capital A/c		Dr.		300
	Priya’s Capital A/c		Dr.		300
	To Realisation A/c					600
	(100 shares of Rs 10 each which were not recorded in the books taken @ Rs 6 each by Paras and Priya and divided between them in their profit sharing ratio)