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The book value of assets (other than cash and bank) transferred to realisation account is Rs. 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30%on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a creditor, in full settlement of his claim.
You are required to record the journal entries for realisation of assets.


Solution

                                                 Journal Entries

DateParticularsLFAmt.(Dr)Amt.(Cr)1.Realisation A/c                                                                    Dr.1,00,000   To Sundry Assets A/c1,00,000(Assets transferred to realisation exceptcash/bank)                                                                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––2.Atul's Capital A/c                                                                Dr.40,000   To Realisation A/c40,000(50 % of asset worth Rs. 1,00,000 taken over byAtul of 20 % discount)                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––3.Bank A/c                                                                             Dr.26,000   To Realisation A/c26,000(Being 40 % of remaining asset sold at profit of30 % on cost i.e., 20,000 + 6,000)                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––4.No entry will be passed for 5% of remaining asset asset being absolute and remaining assethanded over to creditors in full settlement

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