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Question -

Record necessary journal entries to record the following unrecorded liabilities and assets in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for ₹ 3,000,
2. Ashish, an old customer whose Account for ₹ 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of ₹ 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize ₹ 400. It was taken away by Priya at an estimated price less 25%,
5. 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.



Answer -

 Books of Paras and Priya

 

Journal

 

 

 

Particulars

L.F.

Amount

Amount

1)

Bank A/c

Dr.

 

3,000

 

 

To Realisation A/c

 

 

 

3,000

 

(Unrecorded furniture sold)

 

 

 

 

 

 

 

 

 

 

2)

Bank A/c

Dr.

 

600

 

 

To Realisation A/c

 

 

 

600

 

(Bad Debt recovered which was previously written off as bad)

 

 

 

 

 

 

 

 

 

 

3)

Paras’s Capital A/c

Dr.

 

30,000

 

 

To Realisation A/c

 

 

 

30,000

 

(Unrecorded goodwill taken over by Paras)

 

 

 

 

 

 

 

 

 

4)

Priya’s Capital A/c

Dr.

 

300

 

 

To Realisation A/c

 

 

 

300

 

(Unrecorded Typewriter estimated ₹ 400 taken over by Priya at

25% less price)

 

 

 

 

 

 

 

 

 

5)

Paras’s Capital A/c

Dr.

 

300

 

 

Priya’s Capital A/c

Dr.

 

300

 

 

To Realisation A/c

 

 

 

600

 

(100 shares of ₹ 10 each  which were not recorded in the books 

taken @ ₹ 6 each by Paras and Priya and divided between them in

their profit sharing ratio)

 

 

 

 

 

 

 

 

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