Q5. A, B, and C were partners sharing profits and losses in the proportion of 2:2:1. Following is their balance sheet as on 31st March, 2013. [10]
Balance sheet as on 31st March, 2013
Liabilities
|
Amount
(Rs. )
|
Assets
|
Amount
(Rs.)
|
Amount
(Rs.)
|
Capital Account
|
Machinery
|
25000
| ||
A
|
30000
|
Stock
|
10000
| |
B
|
10000
|
Debtors
|
27500
| |
C
|
10000
|
Less: R.D.D.
|
|
26000
|
General Reserve
|
3000
|
Investment
|
12000
| |
Creditors
|
20000
|
Profit and Loss A/c
|
9000
| |
A’s Loan Account
|
4000
|
Bank
|
2000
| |
Bills Payable
|
7000
| |||
84000
|
84000
|
On the above date, the partners decided to dissolve the firm.
(1) Assets were realised as -
Machinery Rs. 22,500, Stock Rs. 9,000, Investment Rs. 10,500, Debtors Rs. 22,500
(2) Dissolution expenses were Rs. 1,500.
(3) Goodwill of the firm realised Rs. 12,000
Pass the necessary journal entries int he books of the firm.
Answers: Journal Entries in the books of the firm.
Date
|
Particulars
|
L.F.
|
Debit
Rs.
|
Credit
Rs.
|
(1)
|
Realisation A/c ......... Dr.
|
74500
| ||
To Machinery A/c
|
25000
| |||
To Stock A/c
|
10000
| |||
To Debtors A/c
|
27500
| |||
To Investment A/c
|
12000
| |||
[Being assets transferred to Realisation A/c]
| ||||
(2)
|
Creditors A/c ....... Dr.
|
20000
| ||
Bills Payable A/c ..... Dr.
|
7000
| |||
To Realisation A/c
|
27000
| |||
[Being outside liabilities transferred to Realisation A/c Credit side]
| ||||
(3)
|
R.D.D. A/c ...... Dr.
|
1500
| ||
To Realisation A/c
|
1500
| |||
[Being R.D.D. transferred to Realisation A/c]
| ||||
(4)
|
General Reserve A/c .... Dr.
|
3000
| ||
To A’s Capital A/c
|
1200
| |||
To B’s Capital A/c
|
1200
| |||
To C’s Capital A/c
|
600
| |||
[Being General Reserve Transferred to Partners’ capital Account]
| ||||
(5)
|
A’s Capital A/c ...... Dr.
|
3600
| ||
B’s Capital A/c ....... Dr.
|
3600
| |||
C’s Capital A/c ....... Dr.
|
1800
| |||
To Profit and Loss A/c
|
9000
| |||
[Being accumulated loss distrubuted]
| ||||
(6)
|
Bank A/c .... Dr.
|
76500
| ||
To Realisation A/c
|
76500
| |||
[Being Sundry Assets Realised]
| ||||
(7)
|
Realisation A/c ...... Dr.
|
28500
| ||
To Bank A/c
|
28500
| |||
[Being liabilities and dissolution expenses paid]
| ||||
(8)
|
A’s Loan A/c .... Dr.
|
4000
| ||
To Bank A/c
|
4000
| |||
[Being A’s Loan is paid]
| ||||
(9)
|
Realisation A/c ..... Dr.
|
2000
| ||
To A’s Capital A/c
|
800
| |||
To B’s Capital A/c
|
800
| |||
To C’s Capital A/c
|
400
| |||
[Being Profit made on Realisation]
| ||||
(10)
|
A’s Capital A/c ..... Dr.
|
28400
| ||
B’s Capital A/c .... Dr.
|
8400
| |||
C’s Capital A.c .... Dr.
|
9200
| |||
To Bank A/c
|
46000
| |||
[Being the final settlement is made]
|
