Ashu and Harish are partners sharing profits and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2018. Their Balance Sheet on the above date was:
The firm was dissolved on 1st April,2018 and the Assets and Liabilities were settled as follows:
(a) Land and Building b realised ₹ 4,30,000.
(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for ₹ 25,000.
(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary journal entries for dissolution of the firm.
Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit-sharing ratio. Debtors realised for ₹ 46,000, expenses of realisation amounted to ₹ 3,000. Prepare necessary Ledger Accounts.
Answers
HEYA MATE YOUR ANSWER IS
cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary journal entries for dissolution of the firm.
Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 80,000. Ashu agreed to pay Creditor and
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The necessary Ledger Accounts i.e., Realisation Account, Partner’s Capital Accounts and Cash Account are calculated and prepared below:
Explanation:
REALISATION ACCOUNT:
Particulars (Dr.)
Building - Rs. 80000
Machinery - Rs. 70000
Furniture - Rs. 14000
Stock - Rs. 20000
Investments - Rs. 60000
Debtors - Rs. 48000
Ashu's Capital A/c (Creditors) - Rs. 88000
Harish's Capital A/c (Bank Overdraft) - Rs. 50000
Cash (Expenses) - Rs. 3000
Realisation Profit
- Ashu's Capital A/c - Rs. 3600
- Harish's Capital A/c - Rs. 2400
Total = Rs. 6000
Adding all, we get
= 80000 + 70000 + 14000 + 20000 + 60000 + 48000 + 88000 + 50000 + 3000 + 6000
= Rs. 4,39,000
Particulars (Cr.)
Creditors - Rs. 88,000
Bank overdraft - Rs. 50,000
Ashu's Capital A/c
- Building - Rs. 95000
- Stock (3: 2) - Rs. 12,000
- Investment (3 : 2 ) - Rs. 36,000
Total = Rs. 1,43,000
Harish's Capital A/c
- Machinery and Furniture - Rs. 80000
- Stock (3: 2) - Rs. 8000
- Investment (3: 2) - Rs. 24000
Total = Rs. 1,12,000
Cash (Debtors) - Rs. 46,000
Adding all, we get
= 88000 + 50000 + 143000 + 112000 + 46000
= Rs. 4,39,000
As per the Parner's Capital Accounts,
The Dr. and the Cr. of Ashu and Harish will be Rs. 1,99,600 and Rs. 1,12,000 respectively.
The cash account are calculated and prepared below:
