Ownclasses

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account.
(i) Bank Loan Rs. 12,000 was paid.
(ii) Stock worth Rs. 16,000 was taken over by partner Q.
(iii) Partner P paid a creditor Rs. 4,000.
(iv) An asset not appearing in the books of accounts realised Rs. 1,200.
(v) Expenses of realisation Rs. 2,000 were paid by partner Q.
(vi) Profit on realisation Rs. 36,000 was distributed between P and Q in 5:4 ratio.

Answer

Dare

Particulars

LF

Debit (Rs)

Credit (Rs)

 

i)

 

 

 

(ii) 

 

 

 

 (iii)

 

 

 (iv)

 

 

(v)

 

 

 

(vi) 

 

 

 

 

Realisation a/c                       Dr

                  To bank a/c

( Being the payment of bank loan made)

 

 

12,000

 

 

 

 16,000

 

 

 
4,000

 

 

 1,200

 

 

 

 2,000

 

 

 

36,000

 

 

 

12,000

 

 

 

 16,000

 

 

 

4,000

 

 

 
1,200

 

 

 

 2,000

 

 

 

20,000

16,000

 

Q’s Capital a/c                     Dr

                    To Realisation a/c

(being stock taken over by partner Q)

 

Realisation a/c                     Dr

             To P’s Capital a/c

(being P made payment to creditors)

 

Cash or bank a/c                  Dr

              To Realisation a/c

( being unrecorded asset realised)

 

Realisation a/c                    Dr

                  To P’s capital a/c

(being realisation expense paid by Q)

 

Realisation a/c                     Dr

                  To P’s capital a/c

                      Q’s capital a/c

(being profit on realisation distributed)