Question

Book Value of assets (other than cash and bank) transferred to Realisation Account is ₹ 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a Creditor, in full settlement of his claim.
You are required to record the Journal entries for realisation of assets.

Answer 1

Journal

Date	Particulars		L.F.	Amount (₹)	Amount (₹)
	Realisation A/c	Dr.		1,00,000
	To Sundry Assets A/c				1,00,000
	(All assets other than cash and bank transferred to Realisation Account)
	Atul’s Capital A/c	Dr.		40,000
	To Realisation A/c				40,000
	(Atul took over 50% of assets worth Rs 1,00,000 at 20% discount)[1,00,000 @ 50% @ 80%]
	Bank A/c	Dr.		26,000
	To Realisation A/c				26,000
	(Assets worth Rs 20,000, i.e. 40% of assets of Rs 50,000 are soldat a profit of 30%) [50,000 × (40/100) × (130/100)]
	No entry for obsolete assets and for the assets givento the creditors in the full settlement as these are already transferred tothe Realisation Account)