Question

Pass necessary journal entries for the following transactions on dissolution of the firm of Rajesh, Somesh and Yogesh after various assets (other than cash) and third party liabilities have been transferred to Realisation Account :
(i) Rajesh took over stock of Rs 4,00,000 at a discount of 20\%.
(ii) Somesh agreed to take over the firm's furniture, not recorded in the books of the firm at Rs 80,000.
(iii) Land and Building of the book value of Rs 60,00,000 was sold for Rs 90,00,000 through a broker who charged 10\% commission.
(iv) Ashish, an old customer, whose account for Rs 70,000 was written off as bad in the previous year, paid 60\% of the amount.
(v) Sundry Creditors of Rs 3,00,000 were settled at a discount of 10\%.
(vi) Realisation expenses amounting to Rs 21,000 were paid by Yogesh.

Hint:

In Dissolution after assets/liabilities transferred to Realisation A/c: - Asset taken by partner: Partner's Capital Dr, Realisation Cr. - Unrecorded asset taken by partner: Partner's Capital Dr, Realisation Cr. - Asset sold: Bank Dr, Realisation Cr (usually net proceeds). - Bad debt recovered: Bank Dr, Realisation Cr. - Liability paid: Realisation Dr, Bank Cr (amount paid). - Unrecorded liability paid: Realisation Dr, Bank Cr. - Expenses paid by firm: Realisation Dr, Bank Cr. - Expenses paid by partner (on behalf of firm): Realisation Dr, Partner's Capital Cr.

Answer 1

Journal Entries
\begin{longtable}{|p{0.5cm}|p{8cm}|r|r|} \hline S.No & Particulars & Dr. (Rs) & Cr. (Rs)
\hline \endfirsthead \hline \endfoot \hline \endlastfoot (i) & Rajesh's Capital A/c \hspace{3.1cm} Dr. & 3,20,000 &
& \indent To Realisation A/c & & 3,20,000
& \textit{(Being stock taken over by Rajesh at 20\% discount [4,00,000 - 80,000])} & &
\hline (ii) & Somesh's Capital A/c \hspace{2.9cm} Dr. & 80,000 &
& \indent To Realisation A/c & & 80,000
& \textit{(Being unrecorded furniture taken over by Somesh)} & &
\hline (iii) & Bank A/c \hspace{5.0cm} Dr. & 81,00,000 &
& \indent To Realisation A/c & & 81,00,000
& \textit{(Being Land and Building sold for Rs 90,00,000 less 10\% commission [9,00,000], net amount received)} & &
% Alternative for (iii) if showing commission separately: % Bank A/c Dr. 90,00,000 % Realisation A/c Dr. 9,00,000 % To Realisation A/c 90,00,000 (Sale) % To Bank A/c 9,00,000 (Commission) % Simplified net entry is usually preferred. \hline (iv) & Bank A/c \hspace{5.0cm} Dr. & 42,000 &
& \indent To Realisation A/c & & 42,000
& \textit{(Being amount received from Ashish, previously written off bad debt [60\% of 70,000])} & &
\hline (v) & Realisation A/c \hspace{3.7cm} Dr. & 2,70,000 &
& \indent To Bank A/c & & 2,70,000
& \textit{(Being sundry creditors paid off at a 10\% discount [3,00,000 - 30,000])} & &
\hline (vi) & Realisation A/c \hspace{3.7cm} Dr. & 21,000 &
& \indent To Yogesh's Capital A/c & & 21,000
& \textit{(Being realisation expenses paid by partner Yogesh)} & &
\hline \end{longtable}