Question

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

Answer 1

Journal

S.N.	Particulars		L.F.	Debits Amount Rs	Credit Amount Rs
(a)	Realisation A/c	Dr.		12,000
	To Bank A/c				12,000
	(Bank loan paid at the time of dissolution)
(b)	Q’s Capital A/c	Dr.		16,000
	To Realisation A/c				16,000
	(Stock taken over by Q)
(c)	Realisation A/c	Dr.		4,000
	To P’s Capital A/c				4,000
	(Creditors paid by P)
(d)	Bank A/c	Dr.		1,200
	To Realisation A/c				1,200
	(Unrecorded assets realised)
(e)	Realisation A/c	Dr.		2,000
	To Q’s Capital A/c				2,000
	(Realisation expenses paid by Q)
(f)	Realisation A/c	Dr.		36,000
	To P’s Capital A/c				20,000
	To Q’s Capital A/c				16,000
	(Realisation Profit distributed )