Question

Aman and Harsh were 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 third party liabilities have been transferred to Realisation Account:
(a) There was furniture worth ₹ 50,000. Aman took over 50% of the furniture at 10% discount and the remaining furniture was sold at 30% profit on book value.
(b) Profit and Loss Account was showing a credit balance of ₹ 15,000 on the date of dissolution.
(c) Harsh’s loan of ₹ 6,000 was discharged at ₹ 6,200.
(d) The firm paid realisation expenses amounting to ₹ 5,000 on behalf of Harsh who had to bear these expenses.
(e) There was a bill for 1,200 under discount. The bill was received from Soham who proved insolvent and a first and final dividend of 25% was received from his estate.
(f) Creditors, to whom the firm owed ₹ 6,000, accepted stock of ₹ 5,000 at a discount of 5% and the balance in cash.

Answer 1

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statement

Answer 2

Answer:

As per the journal,

(A) An amount of Rs. 22,500 and Rs. 32,500 has been debited from the Aman's capital account and the bank account respectively and it has been credited to Realisation account.

This is being the amount obtained by realizing the assets.

(B) An amount of Rs. 15000 has been debited from the Profit and Loss account and it has been credited to the Aman's and the Harsh's Capital A/c  of an amount of Rs. 7500 each.

This is being the amount obtained when distributing the profit.

(C) An amount of Rs. 6000 and Rs. 200 has been debited from the Harsh's Loan and the realisation account respectively and it has been credited to the Bank A/c

This is being the amount obtained when discharged the loan.

(D) An amount of Rs. 5000 has been debited from the Harsh's capital account and it has been credited to the Bank account.

This is being expenses paid on behalf of partner.

(E) An amount of Rs. 300 has been debited from the Bank account and it has been credited to the Realisation account.

This is being the received amount.

An amount of Rs. 1200 has been debited from the Realisation account and it has been credited to the Bank account.

This is being the paid amount.

(F) An amount of Rs. 1250 has been debited from the Realisation account and it has been credited to the Bank account.

This is being the amount paid by the creditors.