Pass necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
(a) There was an old furniture in the firm which had been written off completely in the books. This was sold for ₹ 3,000.
(b) Ashish, an old customer whose account for ₹ 1,000 was written off as bad in the previous year paid 60% of the amount.
(c) Paras agreed to takeover the firm’s goodwill (not recorded in the books of the firm) at a valuation of ₹ 30,000.
(d) There was an old typewriter which had been written off completely from the books. It was estimated to realise ₹ 400. It was taken by Priya at an estimated price less 25%.
(e) There were 100 shares of ₹ 10 each in Star Limited acquired at a cost of ₹ 2,000 which had been written-off completely from the books. These shares are valued @ ₹ 6 each and divided among the partners in their profit-sharing ratio.
Answers
Answer:
Pass necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash ) and outside liabilities have been transferred to Realisation Account : <br> (a) Bank Loan ₹ 12,000 was paid . <br> (b) Stock worth ₹ 16,000 was taken over by partner Q . <br> (c) Partner P paid a creditor ₹ 4,000 . <br> (d) An asset not appearing in the books of accounts realised ₹ 1,200 . <br> (e) Expenses of realisation of ₹ 2,000 were paid by partner Q . <br> (f) Profit on realisation ₹ 36,000 was distributed between P and Q in
ratio .
Answer:
As per the journal,
(A) An amount of Rs. 3,000 has been debited from the Bank account and it has been credited to Realisation A/c.
This is being the old and unrecorded furniture sold amount.
(B) An amount of Rs. 6,00 has been debited from the Bank account and it has been credited to the Realisation A/c
This is being the bad debts previously written off now recovered.
(C) An amount of Rs. 30,000 has been debited from the Para's capital account and it has been credited to the Realisation A/c
This is being the unrecorded goodwill taken over by Paras.
(D) An amount of Rs. 300 has been debited from the Priya's Capital account and it has been credited to the Realisation A/c
This is being the unrecorded typewriter taken over by Priya at 25% less price.
(E) An amount of Rs. 300 each has been debited from the Paras and Priya's capital account and it has been credited to the Realisation A/c
This is being the 100 unrecorded shares of Rs.10 each in the books taken @ Rs.6 each by Paras and Priya and divided between them in profit sharing ratio.
