Question

X and Y are partners. They decided to dissolve their firm. Pass necessary entries assuming that various assets and external liabilities have been transferred to Realisation Account:

1. X’s loan was appearing on the liabilities side of Balance Sheet at ₹ 40,000. He accepted an unrecorded asset of ₹ 60,000 in full settlement of his account.
2. There was an unrecorded asset estimated at ₹ 20,000, half of which was handed over to an unrecorded liability of ₹ 30,000 in settlement of a claim of ₹ 18,000 a remaining half was sold in the market at 80% of its value.
3. Raman, a Creditor to whom ₹ 25,000 were due to be paid, accepted an unrecorded computer of ₹ 18,000 at a discount of 10% and the balance was paid to him in Cash.
4. Sudhir, an unrecorded creditor of ₹ 40,000 accepted an unrecorded vehicle of ₹ 20,000 at ₹ 25,000 and the balance was paid to him in Cash.
5. There was a Contingent liability in respect of bill discounted but not matured ₹ 20,000.
6. Furniture of ₹ 20,000 and goodwill of ₹ 30,000 were appearing in the Balance Sheet but no other information was provided regarding these two items.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
(1)	X’s Loan A/c    ...Dr.		40,000	-
	To Realisation A/c		-	40,000
	(Being X accepted unrecorded asset of ₹ 60,000 in full settlement)
(2) (i)	Realisation A/c    ...Dr.		12,000	-
	To Bank A/c		-	12,000
	(Being Half of unrecorded liability)
(2) (ii)	Bank A/c    ...Dr.		8,000	-
	To Realisation A/c		-	8,000
	(Being Half of unrecorded asset of sold at 80% value)
(3)	Realisation A/c    ...Dr.		8,800	-
	To Bank A/c		-	8,800
	(Being Creditors are settled)
(4)	Realisation A/c    ...Dr.		15,000	-
	To Bank A/c		-	15,000
	(Being Creditors are settled)
(5)	No Entry		-	-
(6)	Bank A/c    ...Dr.		20,000	-
	To Realisation A/c		-	20,000
	(Being Furniture sold for Cash)