Question

Partice S4 opr 1 7 following position: Cash march 1999 the books of accocents of Mr. Raja disclosed the hand RS 20,000 i Cash at bank Rs. 156000; Debtors: Mahesh Bros: Rs. 151000 Balo Bros :Rs. 25000 Sundry Gorditers : Johnny Bros : Rs. 20,000 Loon Rs. 50 000​

Answer 1

GIVEN: Assets and liabilities of Mr. Raja.
TO FIND: Goodwill/ Capital Reserve
SOLUTION:

As we know,

When the corporation tends to wind up its business all the assets and liabilities are adjusted to find the net assets. And then surplus or loss is transferred to goodwill or reserve account respectively.

The following Journal Entry will be passed,

Cash A/c                               ------dr              20,000

Bank A/c                               ------dr             1,56,000

Debtors A/c                          ------dr             1,76,000

           To Creditors A/c                                                   45,000

           To Loan A/c                                                           50,000

           To Capital Reserve A/c                                       2,57,000

( being Assets and Liabilities Adjusted all together.)

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