Question

Land and building (book value) ₹ 1,60,000 sold for ₹ 3,00,000 through a broker who charged 2% commission on the deal. Journalise the transaction, at the time of dissolution of the firm.

Answer 1

Thank you for asking this question. Here is your answer:

This will be a debit entry like this:

Bank A/c

To realization a/c

(Being land and building sold for ₹ 3,00,000 and paid 2% commission to broken out of it)

The amount for it would be: 2,94,000 Dr  and 2,94,000 Cr

If there is any confusion please leave a comment below.

Answer 2

Answer: It is stated that the land and building book value is 1, 60000/-. It is sold at a price of 3, 00000/- and the agent has got a commission of 25 on the sale value. So if we journalize this transaction at the time of the dissolution of the partnership firm, it can be written as  

Bank Account DR 2, 94,000/-

To Realization a/s CR 2, 94000/-  

(Being land and building sold at Rs3, 00000/- and paid 2% brokerage on the sales value)