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K and P Were Partners in a Firm Sharing Profits in the Ratio of 7:5. on 31-1-2016 Their Firm Was Dissolved. After Transferring Assets (Other than Cash) and Outsiders Liabilities to the Realization Account, You Are Given the Following Information - Accountancy

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K and P were partners in a firm sharing profits in the ratio of 7:5. On 31-1-2016 their firm was dissolved. After transferring assets (other than cash) and outsiders liabilities to the realization account, you are given the following information:

(a) Raman, a creditor for Rs.4, 20,000 accepted building valued at Rs.8, 00,000 and paid the balance to the firm by a cheque.

(b) Rajeev, a second creditor for Rs.1, 70,000 accepted machinery valued at Rs.1, 65,000 in full settlement of his claim.

(c) Ranjan, a third creditor for Rs.90,000 accepted investments of Rs.45,000 and a bank draft of Rs.43,000 in his favour in full settlement of his claim.

(d) P we appointed to do the work of dissolution for which he was allowed Rs.2,000. Actual expenses of dissolution Rs.2,400 were paid by P.

Pass necessary journal entries for the above transactions in the books of K and P.

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Solution

Journal

Date Particulars L.F. Dr. (Rs) Cr. (Rs)

(a)

 

 

 

(b)

 

(c)

 

 

 

 

(d)

 

 

Bank A/c                                                                                                                                            Dr

            To Realisation A/c

(Being Raman accepted building valued at Rs.8,00,000 and paid the balance to the firm)

 

No Entry

 

Realisation A/c                                                                                                                                    Dr

             To Bank A/c

(Being Ranjan accepted investments at Rs.45,000 and paid Rs.43,000 through bank draft in full settlement of his claim)

 

Realisation Capital A/c                                                                                                                          Dr

              To P's A/c

(Being P appointed for dissolution work allowed Rs.2,000 to him; actual expenses of Rs.2,400 were paid by P)

 

3,80,000

 

 

 

 

 

43,000

 

 

 

4,400

 

 

 

3,80,000

 

 

 

 

 

43,000

 

 

 

4,400

 

Concept: Dissolution of Partnership Firm
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