Balance Sheet as on 31st March, 2011
Liabilities
|
Amount
|
Amount
|
Assets
|
Amount
|
Amount
|
Sundry Creditors
|
25000
|
Debtors
|
112500
| ||
Bank Overdraft
|
20000
|
Less: R.D.D.
|
-12500
|
100000
| |
Reserve Fund
|
30000
|
Stock
|
225000
| ||
Capital A/c
|
Furniture
|
50000
| |||
Ganesh
|
230000
|
Motor Car
|
75000
| ||
Chandan
|
150000
|
Cash in Hand
|
5000
| ||
455000
|
455000
|
The Assets realised as follows: Debtors Rs. 90,000, Stock Rs. 2,00,000, and Goodwill Rs. 25000,, Motor Car was taken over by Ganesh for Rs. 70,000 and Furniture by Chandan for Rs. 60,000.
The Creditors were paid Rs. 22500 in full settlement. The expenses of realisation amounted to Rs. 10,000.
Pass necessary journal entries in the books of the firm.
Solution:
In the Journal of Partnership Firm
Date
|
Particulars
|
LF
|
Debit
|
Credit
|
31.3.2011
|
Realisation A/c ....Dr.
|
462500
| ||
To Debtors A/c
|
112500
| |||
To Stock A/c
|
225000
| |||
To Furniture A/c
|
50000
| |||
To Motor Car A/c
|
75000
| |||
[Being assets transferred at their book values to Realisation A/c ]
| ||||
31.3.2011
|
Sundry Creditors A/c ....Dr.
|
25000
| ||
Bank Overdraft A/c ....Dr.
|
20000
| |||
To Realisation A/c
|
45000
| |||
[Being external liabilities transferred at their book valued to realisation A/c ]
| ||||
31.3.2011
|
R.D.D. A/c ....Dr.
|
12500
| ||
To Realisation A/c
|
12500
| |||
[Being R.D.D. transferred to Realisation A/c ]
| ||||
31.3.2011
|
Reserve Fund A/c ....Dr.
|
30000
| ||
To Ganesh's Capital A/c
|
18000
| |||
To Chandan's Capital A/c
|
12000
| |||
[Being Balance in reserve transferred to Capital A/c in their profit sharing ratio]
| ||||
31.3.2011
|
Cash A/c ....Dr.
|
315000
| ||
To Realisation A/c
|
315000
| |||
[Being assets realised into cash]
| ||||
31.3.2011
|
Ganesh's Capital A/c ....Dr.
|
70000
| ||
Chandan's Capital A/c ....Dr.
|
60000
| |||
To Realisation A/c
|
130000
| |||
[Being Motor car and furniture taken over by the partners respectively]
| ||||
31.3.2011
|
Realisation A/c ....Dr.
|
42500
| ||
To Cash A/ c
|
42500
| |||
[Being creditors and Bank overdraft paid in cash ]
| ||||
31.3.2011
|
Realisation A/c ....Dr.
|
10000
| ||
To Cash A/c
|
10000
| |||
[Being expenses of realisation paid in cash]
| ||||
31.3.2011
|
Ganesh's Capital A/c ....Dr.
|
7500
| ||
Chandan's Capital A/c ....Dr.
|
5000
| |||
To Realisation A/c
|
12500
| |||
[Being loss incurred on realisation adjusted to Partners' Capital A/c in the ratio of 3:2]
| ||||
31.3.2011
|
Ganesh's Capital A/c ....Dr.
|
170500
| ||
Chandan's Capital A/c
|
97000
| |||
To Cash A/c
|
267500
| |||
[Being balance in capital A/c paid]
|