Question

\textbf{Pass necessary journal entries for the following transactions on dissolution of the firm of Sachin, Virat and Rohit after various assets (other than cash) and third party liabilities have been transferred to Realisation Account:

Hint:

In Dissolution: - Assets taken by partner: Partner Capital Dr, Realisation Cr. - Liability paid/taken by partner: Realisation Dr, Partner Capital Cr. - Asset realised (Cash/Bank): Bank Dr, Realisation Cr. - Liability paid (Cash/Bank): Realisation Dr, Bank Cr. - Realisation Expenses paid by firm: Realisation Dr, Bank Cr. (If paid by partner: Realisation Dr, Partner Capital Cr). - Unrecorded Asset Realised: Bank Dr, Realisation Cr. - Unrecorded Liability Paid: Realisation Dr, Bank Cr. - Final Balance of Realisation A/c (Profit/Loss) transferred to Partners' Capital A/cs in PSR.

Answer 1

Assumptions: 1. Profit Sharing Ratio (Sachin:Virat:Rohit) is equal (1:1:1) as stated in point (vi). 2. Wife's Loan (external liability) was already transferred to the credit side of the Realisation Account along with other liabilities. Journal Entries: \vspace{0.2cm} \begin{tabularx}{\textwidth}{X r r} \toprule Particulars & Dr. (Rs) & Cr. (Rs)
\midrule \multicolumn{3}{l}{\textit{(i) Stock taken over by Sachin:}}
Sachin's Capital A/c (\(80,000 \times 90\)) \dotfill & 72,000 &
\quad To Realisation A/c \dotfill & & 72,000
\textit{(Being stock taken over by Sachin at 10 discount)} & &
\midrule \multicolumn{3}{l}{\textit{(ii) Creditors taken over by Virat:}}
Realisation A/c \dotfill & 65,000 &
\quad To Virat's Capital A/c \dotfill & & 65,000
\textit{(Being creditors taken over by Virat at Rs 65,000)} & &
\midrule \multicolumn{3}{l}{\textit{(iii) Wife's Loan taken over by Rohit:}}
Realisation A/c \dotfill & 3,00,000 &
\quad To Rohit's Capital A/c \dotfill & & 3,00,000
\textit{(Being wife's loan liability assumed by Rohit)} & &
\midrule \multicolumn{3}{l}{\textit{(iv) Realisation of unrecorded asset (Typewriter):}}
Bank A/c \dotfill & 10,000 &
\quad To Realisation A/c \dotfill & & 10,000
\textit{(Being amount realised from sale of unrecorded typewriter)} & &
\midrule \multicolumn{3}{l}{\textit{(v) Sale of Land and Building (Net Proceeds):}}
Bank A/c (\(70L - (5 \times 70L)\)) \dotfill & 66,50,000 &
\quad To Realisation A/c \dotfill & & 66,50,000
\textit{(Being net proceeds received from sale of Land and Building after 5 commission)} & &
\midrule \multicolumn{3}{l}{\textit{(vi) Distribution of Realisation Loss:}}
Sachin's Capital A/c (\(30,000 \times 1/3\)) \dotfill & 10,000 &
Virat's Capital A/c (\(30,000 \times 1/3\)) \dotfill & 10,000 &
Rohit's Capital A/c (\(30,000 \times 1/3\)) \dotfill & 10,000 &
\quad To Realisation A/c \dotfill & & 30,000
\textit{(Being loss on realisation distributed equally among partners)} & &
\bottomrule \end{tabularx} \vspace{0.2cm}