Maharashtra State BoardHSC Commerce 12th Board Exam
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A, B, and C were partners sharing profits and losses in the proportion of 2:2:1. Following is their balance sheet as on 31st March, 2013. - Book Keeping and Accountancy

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Journal Entry
A, B, and C were partners sharing profits and losses in the proportion of 2 : 2 : 1. Following is their balance sheet as on 31st March, 2013.
 
Balance sheet as on 31st March, 2013
Liabilities
Amount
(Rs. )
Assets
Amount
(Rs.)
Amount
(Rs.)
Capital Account
 
Machinery
 
25,000
A
30,000
Stock
 
10,000
B
10,000
Debtors
 27,500
 
C
10,000
Less: R.D.D.
1,500
26,000
General Reserve
3,000
Investment
 
12,000
Creditors
20,000
Profit and Loss A/c
 
9,000
A’s Loan Account
4,000
Bank
 
2,000
Bills Payable
7,000
     
 
84,000
   
84,000

On the above date, the partners decide to dissolve the firm.(1)  Assets were realised as -
Machinery Rs. 22,500, Stock Rs. 9,000, Investment Rs. 10,500, Debtors Rs. 22,500
(2) Dissolution expenses were Rs. 1,500.
(3) Goodwill of the firm realised Rs. 12,000
Pass the necessary journal entries int he books of the firm.

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Solution

Journal Entries in the books of the firm.
Date Particular   LF Amt(Dr.) Amt(Cr.)
1 For transfer of assets to realisation account:        
   Realisation A/c Dr.     74,500  
  To Machinery A/c          25,000
  To Stock A/c        10,000
  To Debtors A/c           27,500
  To Investment A/c       12,000
           
2.  For transfer of liabilities :        
  Creditors A/c Dr.   20,000  
  Bills Payable A/c Dr.   7,000  
  Reserve for Doubtful Debts A/c Dr.   1,500  
  To Realisation A/c         28,500
           
3. For Assets sold  :        
  Bank A/c Dr.   76,500  
  To Realisation A/c       76,500
           
4.  For payment of liabilities :        
  Realisation A/c Dr.   27,000  
  To Bank A/c         27,000
           
5. For payment of dissolution expenses:        
  Realisation A/c  Dr.   1,500  
   To Bank A/c         1,500
           
6. For distribution of profit among partners :        
  Realisation A/c  Dr.   2,000  
  To A's Capital A/c       8,00
  To B's Capital A/c        8,00
  To C's Capital A/c       4,00
           
7. For payment of loan:        
  A's loan A/c Dr.     4,000  
  To Bank A/c         4,000
           
8. For division of General Reserve:        
  General Reserve A/c Dr.    3,000  
  To A's Capital A/c        1,200
  To B's Capital A/c        1,200
  To C's Capital A/c       6,00
           
9. For division of Debit balance of profit and loss:        
  A's Capital A/c  Dr.    3,600  
  B's Capital A/c  Dr.    3,600  
  C's capital A/c   Dr.     1,800  
  To Profit and loss A/c         9,000
           
10. For payment of capital of partners:        
  A's Capital A/c   Dr.    28,400  
  B's Capital A/c  Dr.    8,400  
  C's Capital A/c  Dr.    9,200  
  To Bank A/c         46,000
Concept: Dissolution of Partnership Firm
  Is there an error in this question or solution?

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