Q.
J, K and L were partners in a firm sharing profits in the ratio of 4:5:1. On 31st March,
2018 their firm was dissolved. On this date the Balance Sheet showed a balance of 1,34,000
in debtors account and a balance of 14,000 in provision for bad debts account. Both the
accounts were closed by transferring their balances to realisation account. 34,000 of the
debtors became bad and nothing could be realised from them on dissolution. K agreed to
Took after the dissolution work for which he was allowed a remuneration of 16,000. K
also agreed to bear dissolution expenses for which he was allowed a lumpsum payment
of 4,000. Actual dissolution expenses were 36,500 and the same were paid from the firm's
cash. Loss on dissolution amounted to 37,000. Pass necessary journal entries for the
above transactions in the books of the firm on its dissolution.
Answers
Answer:
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Explanation:
Particulars
L.F.
Debit
Amount
₹
Credit
Amount
₹
Cash A/c
Dr.
1,30,000
To Realisation A/c (1,34,000 – 4,000)
1,30,000
(Being debtors realised after adjusting for bad debts)
Realisation A/c
Dr.
16,000
To K’s Capital A/c
16,000
(Being remuneration paid for dissolution work)
Realisation A/c
Dr.
4,000
To K’s Capital A/c
4,000
(Being lump-sum payment made to K for bearing dissolution expenses)
K’s Capital A/c
Dr.
6,500
To Cash/Bank A/c
6,500
(Being realisation expenses were to be borne by K but paid out of firm’s cash)
J’s Capital A/c
Dr.
14,800
K’s Capital A/c
Dr.
18,500
L’s Capital A/c
Dr.
3,700
To Realisation A/c
37,000
(Being loss on realisation transferred to partner’s capital accounts), .