Question

03. At the time of Dissolution, total assets are of Rs. 12,00,000 and external liabilities are of Rs.4,80,000. If assets realized 120% and realization expenses paid were Rs.16,000, then the gain or loss on Realisation will be ...
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Answer 1

Answer:

ANSWER:

Journal

S.N.

Particulars

L.F.

Debits

Amount

Rs

Credit

Amount

Rs

(a)

Realisation A/c

Dr.

1,500

To Cash A/c

1,500

(Realisation expenses paid)

(b)

Realisation A/c

Dr.

600

To Mohan’s Capital A/c

600

(Realisation expenses paid by Mohan)

(c)

Realisation A/c

Dr.

2,000

To Mohan’s capital A/c

2,000

(Commission allowed to Mohan on dissolution of the firm)

(d)

No entry

No journal entry is passed because both motor car and creditors accounts have already been transferred to Realisation Account and nothing is recovered or paid in terms of Cash and Bank

Answer 2

Answer:

gain of 224000

Explanation:

12000000+480000+16000 (debit side )

480000+1440000( credit side )

1920000-1696000 =2240000 (gain )