Question

Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs 3,000,
2. Ashish, an old customer whose Account for Rs 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of Rs 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize Rs 400. It was taken away by Priya at an estimated price less 25%,
5. There were 100 shares of Rs 10 each in Star Limited acquired at a cost of Rs 2,000 which had been written-off completely from the books. These shares are valued @ Rs 6 each and divided among the partners in their profit sharing ratio.

Answer 1

 Books of Paras and Priya
Journal Entries

	Particulars	L.F.	Amount (Rs.)	Amount (Rs.)
1)	Bank A/c                                  Dr.       To Realisation A/c (Unrecorded furniture sold)		3,000	3,000
2)	Bank A/c                          Dr.       To Realisation A/c (Bad Debt recovered which was previously written off as bad)		600	600
3)	Paras’s Capital A/c          Dr.       To Realisation A/c (Unrecorded goodwill taken over by Paras)		30,000	30,000
4)	Priya’s Capital A/c           Dr.       To Realisation A/c (Unrecorded Typewriter estimated Rs 400 taken over by Priya at 25% less price)		300	300
5)	Paras’s Capital A/c              Dr. Priya’s Capital A/c               Dr.       To Realisation A/c (100 shares of Rs 10 each  which were not recorded in the books  taken @ Rs 6 each by Paras and Priya and divided between them in their profit sharing ratio)		300 300	600