Question

Sanjay and Sameer were partners in a firm sharing profits in the ration of 2 : 3. On 31.3.2011 their Balance Sheet was as follows: 

Balance Sheet of Sanjay and Sameer                           as on 31.3.2011
Liabilities		Amount Rs	Assets	Amount Rs
Capitals			Land and Building	3,00,000
Sanjay:	2,00,000		Stock	1,00,000
Sameer:	3,00,000	5,00,000	Debtors	1,50,000
Creditors		1,05,000	Bank	1,55,000
Workmen compensation Fund		1,00,000
		7,05,000

The firm was dissolved on 1.4.2011 and the Assets and Liabilities were settled as follows:

(i) Sanjay agreed to take over land and Building at Rs 3,50,000 by paying cash;

(ii) Stock was sold for Rs 90,000.

(iii) Creditors accepted Debtors in full settlement of their claim.

Pass necessary Journal entries for dissolution of the firm.  

Answer 1

Journal
Date	Particular		L.F.	Debit Account Rs	Credit Amount Rs
2011
April, 1	Realisation A/c	Dr.		5,50,000
	To Land and Building A/c				3,00,000
	To Stock A/c				1,00,000
	To Debtors A/c				1,50,000
	(Assets transferred to Realisaiton Account)
	Creditors A/c	Dr.		1,05,000
	To Realisation A/c				1,05,000
	(Creditors transferred to Realisation Account)
	Bank A/c	Dr.		3,50,000
	To Realisation A/c				3,50,000
	(Land and Building taken over by Sanjay for cash)
	Bank A/c	Dr.		90,000
	To Realisation A/c				90,000
	(Stock sold for Rs 90,000)
	Sanjay’s Capital A/c	Dr.		2,000
	Sameer’s Capital A/c	Dr.		3,000
	To Realisation A/c (WN1)				5,000
	(Loss on realization transferred to Partners’ Accounts)
	Workmen Compensation Fund A/c	Dr.		1,00,000
	To Sudha’s Capital A/c				40,000
	To Joshi’s Capital A/c				60,000
	(Workmen Compensation Fund transferred to Partners’ Capital Accounts)
	Sanjay’s Capital A/c	Dr.		2,38,000
	Sameer’s Capital A/c	Dr.		3,57,000
	To Bank A/c (WN2)				5,95,000
	(Final payment made to Partners)