Question

Ishu and Nishu are partners share profits and losses in the ratio of 3:2. They have decided

to dissolve the firm. Assets and external liabilities have been transferred to Realisation Ale. Pass the Journal entries to effect the following

a) Bank Low of 20,000 in paid off.

h) tahu was to bear all expenses of realisation for which she is given a commission of 600 c) Machinery worth Rs. 5,000 was taken over by Nishu at . 4,700. d) Deferred Advertisement Expenditure Ae appeared in the books e 10,000.​

Answer 1

Ishu and Vishu are partners, sharing profits in the ratio of 3 : 2.

Their balance sheet as on 31st March, 2017 was as follows :

Nishu was admitted on that date for 1/6th share on the following terms :

Nishu will bring Rs 56,000 as his share of capital, Goodwill of the firm is valued at Rs 84,000 and Nishu will bring his share of goodwill in cash, Plant and machinery be appreciated by 20%.

All debtors are good,

There is a liability of Rs 9,800 included in sundry creditors that is not likely to arise,

Capital of Ishu and Vishu will be adjusted on the basis of Nishu’s capital and any excess or deficiency will be made by withdrawing or bringing in cash by concerned partner.

Prepare Revaluation Account, Partners’ Capital Account and the Balance Sheet of the firm after the above adjustments.

Hope this'll help you.

Answer 2

Journal entry in the books of ____

(a) Realisation a/c Dr                       20000

              To Bank/Cash a/c                             20000

     (Being bank loan of Rs. 20000 paid off)

(b) Realisation a/c Dr                       600

               To Ishu’s Capital a/c                        600

      (Being Ishu received commission of Rs. 600 for bearing all expenses of realisation)

(c) Nishu’s capital a/c Dr                  4700

                To realisation a/c                             4700

     (Being machinery worth Rs. 5000 was taken over by Nishu at Rs. 4700)

(d) Ishu’s capital a/c Dr                                          6000

       Nishu’s capital a/c Dr                                        4000

           To deferred advertisement expenditure a/c        10000

      (Being deferred advertisement expenditure made)

Journal entry is the act of keeping and recording any economic or non-economic transaction. Transactions are recorded in an accounting journal, which displays a company's debit and credit balances.

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