Question

At the time of dissolution of a partnership firm, the book value of sundry assets transferred to Realisation Account was Rs.2,00,000.50% of these sundry assets were taken by partner A at 20% discount, 40% of remaining assets were sold at a profit of 30% on cost. 5% of the balance was found obsolete and realised nothing. The remaining assets were taken over by a creditor in full settlement of his claim. Which account will be credited and how much amount? (a) Realisation Account by Rs.1,32,000 (b) Cash Account by Rs. 40,000 (c) A’s Capital Account by Rs. 1,00,000 (d) Bank Account by Rs. 52,000 ​

Answer 1

Answer:

1. Realisation A/C....           Dr.             100000

           To Sundry Assets A/C                          100000

(Being assets transferred to Realisation account)

2. Atul's Capital A/C.....      Dr.              40000

            To Realisation A/C                               40000

(Being assets taken over by Atul)

[ Note: 50%of 100000= 50000

Discount= 20% of 50000= 10000

Hence, value after discount= 50000-10000

                                              = 40000]

3. Bank A/C....                      Dr.             26000

              To Realisation A/C                              26000

(Being assets sold)

[ Note: 40% of 50000= 20000

Profit= 30% of 20000= 6000

Hence, value after profit= 20000+6000

                                         = 26000]

4. No entry is passed since creditors are handed over obsolete assets in full settlement of their claim.