Question

Pass the necessary Journal entries for the following transaction on the dissolution of the firm of P and Q after the various assets (Other than cash) and outside liabilities have been transferred to Realisation Account.

(i) Bank Loan Rs 12,000 was paid.

(ii) Stock worth Rs 16,000 was taken over by Partner Q.

(iii) Partner P paid a creditor Rs 4,000

(iv) An assets not appearing in the books of accounts realized Rs 1,200.

(v) Expenses of realisation Rs 2,000 were paid by partner Q.

(vi) Profit on realization Rs 36,000 was distributed between P and Q in 5 : 4 ratio.

 

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(i)	Realisation A/c	Dr.		12,000
	To Bank A/c				12,000
	(Payment of bank loan made)
(ii)	Q’s Capital A/c	Dr.		16,000
	To Realisaiton A/c				16,000
	(Stock taken over by Q)
(iii)	Realisation A/c	Dr.		4,000
	To P’s Capital A/c				4,000
	(Creditors paid by P)
(iv)	Cash/Bank A/c	Dr.		1,200
	To Realisation A/c				1,200
	(Unrecorded assets realised)
(v)	Realisation A/c	Dr.		2,000
	To Q’s Capital A/c				2,000
	(Dissolution expenses paid by Q)
(vi)	Realisation A/c	Dr.		36,000
	To P’s Capital A/c				20,000
	To Q’s Capital A/c				16,000
	(Profit on realisation distributed among  partners in their profit sharing ratio i.e. 5 : 4)