MENU
Question -

What journal entries would be recorded for the following transactions on the dissolution of a firm after various assets (other than cash) on the third party liabilities have been transferred to Realisation Account?
1. Arti took over the Stock worth ₹ 80,000 at ₹ 68,000.
2. There was unrecorded Bike of ₹ 40,000 which was taken over By Mr. Karim.
3. The firm paid ₹ 40,000 as compensation to employees.
4. Sundry creditors amounting to ₹ 36,000 were settled at a discount of 15%.
5. Loss on Realisation ₹ 42,000 was to be distributed between Arti and Karim in the ratio of 3:4.



Answer -

Journal 

 

Particulars

L.F.

Amount

₹

Amount

₹

1

Arti’s Capital A/c

Dr.

68,000

To Realisation A/c

68,000

(Arti took over stock worth ₹ 80,000 at ₹ 68,000)

2.

Karim’s Capital A/c

Dr.

40,000

To Realisation A/c

40,000

(Karim took over an unrecorded bike of  ₹ 40,000)

3.

Realisation A/c

Dr.

40,000

To Bank A/c

40,000

(Compensation paid to the employees )

4.

Realisation A/c

Dr.

30,600

To Bank A/c

30,600

(Creditors amounting ₹ 36,000 were settled at a discount of 15%) [36,000 × (85/100)]

5.

Arti’s Capital A/c

Dr.

18,000

Karim’s Capital A/c

Dr.

24,000

To Realisation A/c

42,000

(Loss on Realisation transferred to Partners’ Capital Account)

Comment(S)

Show all Coment

Leave a Comment

Free - Previous Years Question Papers
Any questions? Ask us!
NodeJS Interview Questions Answers
ASP.Net Interview Questions Answers
Interview Questions Answers
×