What Journal entries would you pass in the following cases?
(a) Expenses of realisation Rs. 1,500
(b) Expenses of realisation Rs. 600 but paid by Mohan, a partner.
(c) Mohan, one of the partners of the firm, was asked to look into the dissolution of the firm for which he was allowed a commission of Rs. 2,000
(d) Motor car of book value Rs. 5,000 taken over by creditors of the book value of Rs. 40,000 in full settlement.

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Solution

(a) Realisation A/C..... Dr. 1500
To Bank A/C 1500
(Being the expenses of realisation incurred by the firm)

(b) Realisation A/C...... Dr. 600
To Mohan's Capital A/C 600
(Being the realisation expenses borne by Mohan)

(c) Realisation A/C...... Dr. 2000
To Mohan's Capital A/C
(Being commission given to Mohan to carry out the dissolution)

(d) No entry is to be passed since the asset has been taken over for full settlement.

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Q. Pass Journal entries in the following cases?
(a) Expenses of realisation ₹ 1,500.
(b) Expenses of realisation ₹ 600 but paid by Mohan, a partner.
(c) Mohan, one of the partners of the firm, was asked to look into the dissolution of the firm for which he was allowed a commission of ₹ 2,000.
(d) Motor car of book value ₹ 50,000 taken over by creditors of the book value of ₹ 40,000 in full settlement.

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.

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

Q. Pass Journal entries for the following:
(a) Realisation expenses amounted to Rs. 10,000 were paid on the behalf of Alok, a partner, with whom it was agreed at Rs. 7,500.
(b) Realisation expenses amounted to Rs. 5,000 It was agreed that the firm will pay Rs. 2,000 and balance by Ravinder, a Partner.
(c) Dissolution expenses amounted to Rs. 10,000 were paid by Amit, a partner, on behalf of the firm.

Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account :

(a) Kunal agreed to pay off his wife's loan of Rs. 6,000.

(b) Total Creditors of the firm were Rs 40,000. Creditors worth Rs 10,000 were given a piece of furniture costing Rs 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.

(d) A machine which was not recorded in the books was taken over by Kunal at Rs 3,000, whereas its expected value was Rs 5,000.

(e) The firm had a debit balance of Rs 15,000 in the Profit and Loss Account on the date of dissolution.

(f) Sarthak paid the realisation expenses of Rs 16,000 out of his private funds, who was to get a remuneration of Rs 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.

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