Question

Abbay carrying on business On 31/3/16, Balance Sheet was as under:

Balance Sheet as on .1st March 2016

Liabilities	Rs.	Assets	Rs.
Capital	1,80,000	Vehicle	15,000
Creditors	45,000	Investment	3,000
Bills Payable	15,000	Plant & Machinery	90,000
Abhay's Loan	60,000	Building	60,000
		Stock	50,000
		Cash	32,000
		Debtor	50,000
	3,00,000		3,00,000

On the above date, a LLP was incorporated to take over the above business on the following terms and conditions :On the above date, a LLP was incorporated to take over the above business on the
following terms and conditions :
(i) All assets (except cash and vehicle) and all liabilities (except Abhay's loan) to be taken over by the company for which all assets are valued at par except building and stock which  are .considered worth   75.,000 and 60;000 respectively.
(ii) Goodwill is valued at 1,00,000 .
(iii) Abbay and Vasant will be the partners of LLP sharing profits equally. They contributed 1,60,000 each.
(iv) Abhay's loan is  to be partly settled by his taking over the cash and vehicle at  par.
(v) The purchase consideration is received in cash.
Show Ledger Accounts to close the books of the firm, Journal Entries in the books of Purchaser and Statement of Assets and Liabilities. 

Answer 1

In the books of Abhay
Statement of Purchase Consideration

	Particulars	Rs.
(A)	Assets Taken Over :
	Investment	3,000
	Plant and Machinery	90,000
	Debtors	50,000
	Building	75,000
	Stock	60,000
	Goodwill	1,00,000
	(i) Total	3,78,000
(B)	Liabilities Taken Over :
	Creditors	45,000
	Bills Payable	15,000
	(ii) Total	60,000
	Purchase Consideration (i) - (ii)	3,18,000

Realisation A/c

Particulars	Rs	Particulars	Rs
To Sundry Assets :		By Sundry Liabilities :
Building	60,000
Plant & Machinery	90,000	Creditors	45,000
Stock	50,000	Bills Payable	15,000
Debtors	50,000	By LLP A/c	3,18,000
Investments	3,000
To Capital A/c	1,25,000
(Profit on Dissolution transferred to Capital A/c)
	3,78,000		3,78,000

Abhay 's Loan A/c

Particulars	Rs.	Particulars	Rs.
To Vehicle A/c	15,000	By Bal. b/d	60,000
To Cash/Bank A/c	45,000
	60.000		60,000

LLP Co's A/c

Particulars	Rs.	Particulars	Rs.
To Realisation A/c	3,18,000	By Cash/Bank A/c	3,18,000
	3,18,000		3.18,000

Cash /Bank A/c

Particulars	Rs.	Particulars	Rs.
To Bal. b/d	32,000	By Abhay's Loan A/c	45,000
To LLP Co's A/c	3,18,000	BY Capital A/c	3,05,000
	3,50,000		3,50,000

Capital A/c

Particulars	Rs.	Particulars	Rs.
To Cash/Bank A/c	3,05,000	By Bal b/d	1,80,000
		By Realisation A/c	1,25,000
	3,05,000		3,05,000

In the books of Abbay and V asant LLP Co.
Journal Entries (31/3/2016)

Date	Particulars	L/F	Dr. Rs.	Cr. Rs.
1.	Business Purchase A/c Dr.		3,18,000	-
	To Vendor's A/c		-	3,18,000
	(Being Purchase of business recorded)
2.	Investn1ent A/c         Dr.		3,000	-
	Plant & Machinery A/c Dr.		90,000	-
	Debtors A/c              Dr.		50,000	-
	Building A/c              Dr.		75,000	-
	Stock                        Dr.		60,000	-
	Goodwill A/c              Dr.		1,00,000	-
	To Creditors A/c		-	45,000
	To Bills Payable A/c		-	15,000
	To Business Purchase A/c		-	3,18,000
3.	Bank A/c                  Dr.		3,20,000	-
	To Abhay's Capital A/c		-	1,60,000
	To Vasant's Capital A/c		-	1,60,000
	(Being Capital contributed by the partners)
4.	Vendor's A/c                Dr.		3,18,000	-
	To Bank A/c		-	3,18,000
	(Being purchase consideration settled)

Part B : Statement of Account
Statement of Assets & Liabilities of Abbay and V asant LLP as on 31.3.2016 :

	Particulars	Figures as at the end of the current reportin2 period
(I)	Contribution and Liabilities :
1.	1. Partner' fund :
	(a) Contribution	3,20,000
	(b) Reserve & Surplus	-
2.	Liabilities :	-
	(a) Secured Loan	-
	(b) Unsecured Loan	-
	(c) Short-term borrowings	-
	(d) Creditorsffrade Payables	60,000
	Advance from Customers
	(e) Other Liabilities (to specify)	-
	(f) Provisions :	-
	(i) For Taxation	-
	(ii) For Contingencies	-
	(iii) For Insurance	-
	(iv) Other Provisions (if any)	-
	Total	3,80,000
(II)	Assets:
	(a) Fixed Assets
	(b) Investments
	(c) Loans &  Advances
	(d) Inventories
	( e) Debtors /Trade Receivables
	(f) Cash/Cash Equivalents
	(g) Other Assets (to specify)
	Total	3,80,000