Advertisement Remove all ads

E and F Were Partners in a Firm Sharing Profits in the Ratio of 7:3. on 28-2-2016 the Firm Was Dissolved. After Transferring Assets (Other than Cash) and Outsider'S Liabilities to Realization Account You Are Given the Following Information - Accountancy

Advertisement Remove all ads
Advertisement Remove all ads
Advertisement Remove all ads

E and F were partners in a firm sharing profits in the ratio of 7:3. On 28-2-2016 the firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realization account you are given the following information:

(a) A creditor for Rs 3, 00,000 accepted building valued Rs 3, 75,000 and paid the firm Rs 75,000.

(b) A second creditor for Rs 93,000 accepted stock valued at Rs 90,000 in full settlement of his claim.

(c) A third creditor amounting to Rs 60,000 accepted Rs 37,000 in cash and investments of the book value of Rs 40,000 in full settlement of his claim.

(d) Loss on dissolution was Rs 7,000.

Pass necessary journal entries for the above transactions in the books of the firm assuming that all payments were made by cheque.

Advertisement Remove all ads

Solution

                                                             In the books of ……
                                                                      Journal

Date Particulars L.F.

Dr.

Rs

Cr.

Rs

(a)

 

 

 

(b)

(c)

 

 

 

 

(d)

 

 

 

 

Bank A/c                                               Dr

            To Realisation A/c

(Being creditors paid Rs 75,000 to the firm)

 

No entry

Realisation A/c                                    Dr

            To Bank A/c

(Being third creditor accepted 37,000 in cash and investments of the book value of 40,000 in full settlement of his claim)

 

E’s Capital A/c                                    Dr

F’s Capital A/c                                     Dr

           To Realisation A/c

(Being loss on dissolution transferred to partners capital accounts)

 

75,000

 

 

 

 

37,000

 

 

 

 

4,900

2,100

 

 

 

75,000

 

 

 

 

37,000

 

 

 

 

 

7,000

 

Note: No entry will be made when asset is taken over by the creditor

Concept: Dissolution of Partnership Firm
  Is there an error in this question or solution?
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×