o 18, Charu, Divya and Esha were partners in a firm. Pass journal entries for the following transactions on dissolution of the firm after various assets and external liabilities have beern
transferred to Realisation A/c:
(i) An unrecorded asset of R40,000 was given to an unrecorded creditor of R60,000 in
settlement of his claim of R45,000 and the balance was paid to him in cash.
(ii) A Motorbike which was not recorded in the books was taken over by Charu at
10,000, whereas its expected value was 15,000.
(iil) Creditors, to whom the firm owed R50,000, accepted stock of 30,000 at a discount
of 20% and the balance in cash.
(iv) X, an old customer, whose account for T20,000 was written off as bad in the previous year, paid 40% of the amount written off.
(v) Esha paid the realisation expenses of R20,000 out of her pocket and she was to get a fixed remuneration of R25,000 for completing the dissolution process. (vi) Divya's loan of T40,000 was discharged at 42,000.
Answers
Answer:
and the correct answer is option 5
(i) When an unrecorded asset worth R40,000 is given to an unrecorded creditor of R60,000 in settlement of his claim of R45,000 and the balance is paid to him in cash, the following journal entry is passed:
Realisation A/c Dr. 50,000
To Unrecorded Asset A/c 40,000
To Unrecorded Creditor A/c 10,000
(ii) When Charu takes over a Motorbike which was not recorded in the books at T10,000, whereas its expected value was T15,000, the following entry is passed:
Charu's A/c Dr. 10,000
To Motorbike A/c 10,000
(iii) When creditors, to whom the firm owed T50,000, accept stock of T30,000 at a discount of 20% and the balance in cash, the following entry is passed:
Creditors A/c Dr. 40,000
Discount Allowed A/c Dr. 10,000
To Stock A/c 30,000
To Bank A/c 20,000
(iv) When X, an old customer, whose account for T20,000 was written off as bad in the previous year, pays 40% of the amount written off, the following entry is passed:
Bank A/c Dr. 8,000
To X's A/c 8,000
(v) When Esha pays the realisation expenses of T20,000 out of her pocket and she is to get a fixed remuneration of T25,000 for completing the dissolution process, the following entry is passed:
Realisation Expenses A/c Dr. 20,000
To Esha's A/c 20,000
(vi) When Divya's loan of T40,000 is discharged at T42,000, the following entry is passed:
Divya's Loan A/c Dr. 42,000
To Bank A/c 42,000
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