Question

Pass the necessary journal entries for the following transactions, on the dissolution of a partnership firm of Kavita and Suman on 31^st March, 2022, after the various assets (other than cash) and third party liabilities have been transferred to Realisation Account.

1. Kavita took over stock amounting to ₹ 1,00,000 at ₹ 90,000.
2. Creditors of ₹ 2,00,000 took over Plant and Machinery of ₹ 3,00,000 in full settlement of their claim.
3. There was an unrecorded asset of ₹ 23,000 which was taken over by Suman at ₹ 17,000.
4. Realisation expenses ₹ 2,000 were paid by Kavita.
5. Bank loan ₹ 21,000 was paid off.
6. Loss on dissolution amounted to ₹ 7,000.

Answer 1

Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
(a)	Kavita's Capital A/c    ...Dr.		90,000
	To Realisation A/c			90,000
	(Being stock taken over by Kavita)
(b)	No Entry
(c)	Suman's Capital A/c    ...Dr.		17,000
	To Realisation A/c			17,000
	(Being an unrecorded asset taken over by Suman)
(d)	Realisation A/c     ...Dr.		2,000
	To Kavita's Capital A/c			2,000
	(Being realisation expenses paid by Kavita credited to her capital account)
(e)	Realisation A/c     ...Dr.		21,000
	To Bank A/c			21,000
	(Being bank loan paid)
(vi)	Kavita's Capital A/c    ...Dr.		3,500
	Suman's Capital A/c     ...Dr.		3,500
	To Realisation A/c			7,000
	(Being loss on dissolution transferred to the capital accounts of partners equally)