Question

Give the necessary journal entries for the following transactions on dissolution of the firm of Aman and Rajat on 31st March, 2024, after the transfer of various assets (other than cash) and the third party liability to Realisation Account. They shared profits and losses in the ratio of 2 : 1.

1. Creditors of ₹ 30,000 took over stock of ₹ 10,000 at 10% discount and the balance was paid to them in cash.
2. There was an old typewritter which had been written off completely. It was estimated to realize ₹ 600. It was taken away by Rajat at 25% less than the estimated price.
3. Aman agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 1,000 and to bear all realization expenses. Actual realisation expenses ₹ 800 were paid by the firm.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
31-03-2024	Realisation A/c Dr.		21,000	—
	To Bank A/c		—	21,000
	(Being creditors of ₹ 30,000 settled by giving stock valued at ₹ 9,000 and balance paid in cash)
31-03-2024	Rajat’s Capital A/c Dr.		450	—
	To Realisation A/c		—	450
	(Being unrecorded typewriter taken over by Rajat at 25% less than estimated value of ₹ 600)
31-03-2024	Realisation A/c Dr.		1,000	—
	To Bank A/c		—	800
	To Aman’s Capital A/c		—	200
	(Being agreed remuneration of ₹ 1,000 for completing dissolution, out of which ₹ 800 expenses were paid by the firm)

Working Note:

Stock taken over by creditors = ₹ 10,000 − 10% = ₹ 9,000

Cash paid to creditors = ₹ 30,000 − ₹ 9,000 = ₹ 21,000

Typewriter taken over by Rajat = ₹ 600 − 25% = ₹ 450