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Lal and Pal Were Partners in a Firm Sharing Profits in the Ratio of 3 : 7. on 1st April, 2015 Their Firm Was Dissolved. - Accountancy

Numerical

Lal and Pal were partners in a firm sharing profits in the ratio of 3 : 7. On 1st April, 2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to Realisation Account, you are given the following information:
(a) A creditor of ₹ 3,60,000 accepted machinery valued at ₹ 5,00,000 and paid to the firm ₹ 1,40,000.
(b) A second creditor for ₹ 50,000 accepted stock at ₹ 45,000 in full settlement of his claim.
(c) A third creditor amounting to ₹ 90,000 accepted ₹ 45,000 in cash and investments worth ₹ 43,000 in full settlement of his claim.
(d) Loss on dissolution was ₹ 15,000.
Pass necessary Journal entries for the above transactions in the books of firm assuming that all payments were made by cheque.

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Solution

In the books of …

Journal Entry

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

(a)

Bank A/c

Dr.

 

1,40,000

 

 

  To Realisation A/c

 

 

1,40,000

 

(A creditor of Rs 3,60,000 accepted machinery valued at Rs 5,00,000 and paid Rs 1,40,000 to the firm)

 

 

 

(b)

No entry

 

 

 

 

(c)

Realisation A/c

Dr.

 

45,000

 

 

   To Cash A/c

 

 

 

45,000

 

(A third creditor of Rs 90,000 accepted Rs 45,000 in cash and investments worth Rs 43,000 in full settlement of his claim)

 

 

 

 

(d)

Lal’s Capital A/c

Dr.

 

4,500

 

 

Pal’s Capital A/c

Dr.

 

10,500

 

 

  To Realisation A/c

 

 

 

15,000

 

(Loss on dissolution transferred to partners’ capital accounts)

 

 

 

 
Concept: Accounting Treatment of Bill - Journal Entries and Ledger
  Is there an error in this question or solution?
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 7 Dissolution of a Partnership Firm
Exercise | Q 14 | Page 54
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