Question

Bunty decided to convert his Business into a LLP under the name of Bunty  and Babli LLP. The Balance· Sheet ·as at 31/3/2017 was as follows :

Balance Sheet as on 31st March, 2017

Liabilities	Rs.	Assets	Rs.
Capital	72,500	Plant	45,000
General Reserve	15,000	Vehicle	20,000
Bank Overdraft	20,000	Copy Rights	5,000
Creditors	42,500	Stock	42,500
		Bills Receivable	30,000
		Debtors	7,500
	1,50,000		1,50,000

Bunty & Babli have decided to share profits equally. The capital contribution is Rs. 62,500 each.
other terms and con.ditions as follows : 
(i) Goodwill valued at Rs. 23,000.
(ii) Plant is to be taken over at Rs. 50,000.
(iii) LLP, to pay Bank Overdraft and Creditors immediately for which the LLP should sell stock at Rs. 43,000.
(iv) The LLP took a loan off 25,000 by mortgaging plant.
You are required to give :
(a) Necessary ledgers in the books of vendor.
(b) Journal Entries.and Balance Sheet in the books of Bunty and Babli LLP.

Answer 1

Statement of Purchase Consideration

Particulars	Rs.
(A) Assets Taken Over :
Goodwill	23,000
Plant	50,000
Vehicle	20,000
Copy Rights	5,000
Stock	42,500
Bills Receivable	30,000
Sundry Debtors	7,500
	1,78,000
(B) Less : Liabilities Taken over
Sundry Creditors	42,500
Bank Overdraft	20,000
Purchase Consideration	1,15,500

In the Books of Bunty
Realisation A/c

Particulars	Rs.	Particulars	Rs.
To Sundry Assets	1,50,000	By Sundry Liabilities	62,500
To Capital A/c	28.000	By Cash/Bank A/c	1,15,500
(Profit on Dissolution)	1,78,00		1,78,000

Capital A/c 

Particulars	Rs.	Particulars	Rs.
To Cash/Bank A/c	1,15,500	By Bal b/d	72,500
		By General Reserve	15,000
		By Realisation A/c
	1,15,500		1,15,500

Cash/Bank A/c

Particulars	Rs.	Particulars	Rs.
To Realisation A/c	1,15,500	By Capital A/c	1,15,500
(LLP)
	1,15,500		1,15,500

In the Books of LLP
Journal Entries (31.3.17)

Date	Particulars	L/F	Dr.	Cr.
1.	Business Purchase A/c Dr.		1,15,500	-
	To Vendor's A/c		-	1,15,500
2.	Goodwill A/c             Dr.		23,000
	Plant A/c                  Dr.		50,000
	Copy Rights A/c        Dr.		5,000
	Vehicle A/c               Dr.		20,000
	Stock A/c                 Dr.		42,500
	Bills Receivable A/c   Dr.		30,000
	Sundry Debtors A/c   Dr.		7,500
	To Sundry Creditors		-	42,500
	To Bank Overdraft A/c		-	20,000
	To Business Purchase A/c		-	1,15,500
	(Being assets and liabilities taken over)
3.	Bank A/c                  Dr.		1,25,000
	To Bunty's Capital A/c		-	62,500
	To Babli's Capital A/c		-	62,500
	(Being Capital contributed)
4.	Bank A/c                  Dr.		25,000	-
	To Bank Loan A/c		-	25,000
5.	Bank A/c                  Dr.		43,000	-
	To Stock A/c		-	43,000
	(Being stock sold off)
6.	Bank Overdraft A/c   Dr.		20,000	-
	Creditors A/c           Dr.		42,500	-
	To Bank A/c		-	62,500
7.	Vendor's A/c              Dr.		1,15,500	-
	To Bank A/c		-	1,15,500
	(Being purchase consideration paid off)

Part B : Statement of Account
Statement of Assets and Liabilities (In Rupees .... )

	Particulars	Figures as at the  end the current reporting period
	1	2
I.	Contribution and Liabilities
1.	Partner's funds:
	(a) Contribution	1,25,000
	(b) Reserves and Surplus	500
2.	Liabilities :
	(a) Secured Loans	25,000
	(b) Unsecured Loans
	(c) Short-term borrowings
	( d) Creditorsffrade Payables -
	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	1,50,500
(II)	Assets:
	(a) Fixed Assets	98,000
	(b) Investments
	(c) Loans and Advances
	(d) fuventories
	(e) Debtorsffrade Receivables	37,500
	(f) Cash & Cash Equivalents	15,000
	(g) Other Assets (to specify)
	Total	1,50,500