Question

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

Answer 1

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)