Question

Pass the necessary journal entries for the following transactions on the dissolution of the firm of Sachin, Virat and Rohit after various assets (other than cash) and third party liabilities have been transferred to Realisation Account:

1. Sachin took over stock of book value of ₹ 80,000 at a discount of 10%.
2. Virat agreed to take over the firm’s creditors of the book value of ₹ 70,000 at a valuation of ₹ 65,000.
3. Rohit took over his wife’s loan of ₹ 3,00,000.
4. There was an old typewriter which had been written off completely from the books. It realised 10,000.
5. Land and Building of the book value of ₹ 50,00,000 was sold for ₹ 70,00,000 through a broker who charged 5% commission on the deal.
6. Loss on realisation ₹ 30,000 was to be distributed between Sachin, Virat and Rohit equally.

Answer 1

Journal
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
(i)	Sachin’s Capital A/c    ...Dr.		72,000	-
	To Realisation A/c		-	72,000
	(Being Stock taken over by Sachin, recorded)
(ii)	Virat’s Capital A/c    ...Dr.		65,000	-
	To Realisation A/c		-	65,000
	(Being Virat took over creditors)
(iii)	Realisation A/c    ...Dr.		3,00,000	-
	To Rohit’s Capital A/c		-	3,00,000
	(Being Rohit under took the responsibility to pay his wife’s loan)
(iv)	Bank A/c    ...Dr.		10,000	-
	To Realisation A/c		-	10,000
	(Being typewriter realised)
(v)	Bank A/c    ...Dr.		66,50,000	-
	To Realisation A/c		-	66,50,000
	(Being land and building realised ₹ 70,00,000 – ₹ 3,50,000 = ₹ 66,50,000)
(vi)	Sachin’s Capital A/c    ...Dr.		10,000	-
	Virat’s Capital A/c    ...Dr.		10,000	-
	Rohit’s Capital A/c    ...Dr.		10,000	-
	To Realisation A/c		-	30,000
	(Being less on realisation distributed)