Pass journal entries for the following at the time of dissolution of a firm:
(a) Sale of Assets – ₹ 50,000.
(b) Payment of Liabilities – ₹ 10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to ₹ 15,000. The firm had agreed with Amrit, a partner to reimburse him up to ₹ 10,000.
(e) Z, an old customer whose account for ₹ 6,000 was writte off as bad in the previous year paid 60% of the amount written off.
(f) Investment (Book Value ₹ 10,000) realised at 150%.
Answers
Answer:
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Answer:
Answer:
As per the journal,
(A) An amount of Rs. 50000 has been debited from the Bank account and it has been credited to Realisation A/c.
This is being assets realized for cash.
(B) An amount of Rs. 10000 has been debited from the Realisation account and it has been credited to the Bank A/c
This is being the payment of liabilities made.
(C) An amount of Rs. 2500 has been debited from the Realisation account and it has been credited to the X's Capital A/c
This is being the 5% commission allowed to X's on sale of assets of Rs.50,000
(D) An amount of Rs. 10000 has been debited from the Realisation account and it has been credited to the Amrit Capital A/c
This is being Amrit was allowed remuneration on account of relalisation
An amount of Rs. 15000 has been debited from the Amrit Capital account and it has been credited to the Bank A/c
This is being the realisation expense paid on behalf of Amrit.
(E) An amount of Rs. 3600 has been debited from the Bad debts Recovered A/c and it has been credited to the Realisation A/c
This is being the bad debts which are recovered.
(F) An amount of Rs. 15000 has been debited from the Cash A/c and it has been credited to the Realisation A/c
This is being the investments which are realized at 150%
