5. Give the necessary Journal entries to record the following unrecorded assets in the books of Mand N: (a) A partner, Mr. 'M'agreed to take over the firm's goodwill (not recorded in the books of the firm) at a valuation of 50,000. (b) T, an old customer whose account for 2,000 was written off as bad in the previous year, paid 50%. (c) A Joint Life Policy having a surrender value of 15,000 remain unrecorded. (d) There was an old computer which had been written off completely in the books of accounts. It was estimated to realise 25,000. It was taken over by N, a partner at the estimated price less 40%. (e) M, a partner, undertook to pay Mrs. M's loan of 20,000.
Answers
(a) Bank A/C....... Dr. 3000
To Realisation A/C 3000
(Being unrecorded furniture sold off)
(b) Bank A/C...... Dr. 600
To Realisation A/C 600
(Being cash received on recovery of 60% of bad debt)
(c) Para's Capital A/C..... Dr. 30000
To Realisation A/C 30000
(Being unrecorded asset taken over by Para)
(d) Priya's Capital A/C..... Dr. 300
To Realisation A/C 300
(Being unrecorded asset taken over by Priya at a discount of 25%)
Explanation:
Journal entries to record the following unrecorded assets in the books of Mand N: (a) A partner, Mr. 'M'agreed to take over the firm's goodwill (not recorded in the books of the firm) at a valuation of 50,000. (b) T, an old customer whose account for 2,000 was written off as bad in the previous year, paid 50%. (c) A Joint Life Policy having a surrender value of 15,000 remain unrecorded. (d) There was an old computer which had been written off completely in the books of accounts. It was estimated to realise 25,000. It was taken over by N, a partner at the estimated price less 40%.