Question

Pass the journal entries for the following transactions on the dissolution of a firm :-
(i) A, a partner took over 50% of the stock at a discount of 25% [Book value of stock Rs. 20,000).
Balance of stock was sold at a loss of 10%.
Compensation to an employee paid by firm amounted to Rs. 40,000.
(iv) There was an unrecorded assets of Rs. 5000 which was taken over by B at 20% less.
(v) 'A' a partner under took to pay Mrs. A's Loan Rs. 10,000.

with solution...fast answer​

Answer 1

Answer:

A's capital A/C... dr. 7500

to realisation A/C... 7500

(book value = 20,000 , 50% of stock = 10,000 taken by A at 25% discount means 25% of 10,000 = 2500 it means value at which it is taken over = 10,000-2500=7500)

cash A/C.... Dr. 9000

to realisation A/C 9000

remaining stock = 10,000 at 10% loss (1000 ) = 9000

realisation A/C... Dr. 40,000

to cash A/C... 40,000

B's capital A/C... Dr. 4000

to realisation A/C... 4000

realisation A/C.... Dr. 10,000

to A's capital A/C... 10,000