What journal entries would you pass for the following transactions on the dissolution of a firm of partners A&B. 6
i. Dissolution expenses amounted to Rs. 500 paid by A.
ii. An unrecorded assets realised Rs. 2500.
iii. Stock worth Rs. 2000 taken by A.
iv. Creditors were paid Rs. 3000
v. Building was sold for Rs. 70,000
vi. Profit on realisation Rs. 4000 is to be distributed between partners A and B in the ratio of 3:1.

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Solution

Dear Student

In case of dissolution of the firm all the assets and liabilities are transferred to realisation account so it has been assumed that all assets and liabilities are transferred to realisation account.

Journal in the books of A & B

Date Particulars Debit Credit

Realisation A/c Dr. 500

To A's Capital A/c 500

(Being Dissolution expenses paid by A)

Cash A/c Dr. 2,500

TO Realisation A/c 2,500

(Being received from sale of unrecorded asset)

A's Capital A/c Dr. 2,000

To Realisation A/c 2,000

(Being stock taken over by A)

Realisation A/c Dr. 3,000

To Cash A/c 3,000

(Being creditors paid)

Cash A/c Dr. 70,000

To Realisation A/c 70,000

(Being building sold)

Realisation A/c Dr. 4,000

To A's Capital A/c 3,000

To B's Capital A/c 1,000

(Being profit on realisation distributed among partners)

Regards

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Similar questions

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account.

(i) Bank loan Rs 12,000 was paid.

(ii) Stock worth Rs 16,000 was taken over by partners.

(iii) Partner P paid a creditor Rs 4,000.

(iv) An asset not appearing in the books of accounts realised Rs 1,200.

(v) Expenses of realisation Rs 2,000 were paid by partner Q.

(iv) Profit on realisation Rs 36,000 was distributed between P and Q in 5 : 4 ratio.

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

Pass journal entries for the following transactions :

(i) Dissolution expenses amounted to Rs. 20,000. Rs. 8,000 were to be borne by the firm and the balance by Maruti, a partner. The expenses were paid by Maruti.

(ii) Sudhir, a partner, was allowed a remuneration of Rs. 10,000 to carry out dissolution of the firm. He was to bear all expenses of realisation which amounted to Rs. 16,000 were paid by the firm.

(iii) Ravi, a partner, is allowed a remuneration of Rs. 15,000 for dissolution work and is to bear all expenses of realisation which amounted to Rs 5,000 were paid by the firm.

(iv) Anil, a partner, is paid remuneration of Rs. 20,000 for dissolution work. Realisation expenses amounted to Rs. 7,500 were paid by the firm.

(v) Vijay, a partner, paid realisation expenses of Rs 10,000 and these were to be borne by him.

Pass journal entries for the following transactions :

(i) Realisation expenses amounted to Rs. 5,000.

(ii) Realisation expenses amounted to Rs. 8,000 were paid by partner X.

(iii) Realisation expenses amounted to Rs. 10,000 were paid by the firm on behalf of a partner.

(iv) Realisation expenses amounted to Rs. 15,000 were paid by the firm. Mr. X, one of the partners, has to bear these expenses.

(v) Realisation expenses amounted to Rs. 20,000 were paid by the firm. Rs. 8,000 were to be borne by the firm and the balance by Maruti, a partner.

Give the necessary journal entries in each of the following alternative cases :

(i) Realisation expenses amounted to Rs. 500.

(ii) Realisation expenses paid by the firm amounted to Rs. 500 and the partner has to bear the realisation expenses.

(iii) 'A' one of the partners was to bear all the realisation expenses for which he was given a commission of 2% of net cash realised from dissolution. Cash realised from assets was Rs 25,000 and cash paid for liabilities amounted to Rs 5,000

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Journal in the books of A & B
Date	Particulars		Debit	Credit

	Realisation A/c	Dr.	500
	To A's Capital A/c			500
	(Being Dissolution expenses paid by A)

	Cash A/c	Dr.	2,500
	TO Realisation A/c			2,500
	(Being received from sale of unrecorded asset)

	A's Capital A/c	Dr.	2,000
	To Realisation A/c			2,000
	(Being stock taken over by A)

	Realisation A/c	Dr.	3,000
	To Cash A/c			3,000
	(Being creditors paid)

	Cash A/c	Dr.	70,000
	To Realisation A/c			70,000
	(Being building sold)

	Realisation A/c	Dr.	4,000
	To A's Capital A/c			3,000
	To B's Capital A/c			1,000
	(Being profit on realisation distributed among partners)