Question

Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Sami and Usha after various assets (other than cash) and external liabilities have been transferred to the Realisation Account:

1. Creditors of ₹ 18,000 took over all the investments at ₹ 11,000. The remaining amount was paid to them through a cheque.
2. A debtor whose debt of ₹ 23,000 was written off as bad, paid ₹ 15,000 in full settlement.
3. Usha and given a loan of ₹ 16,000 to the firm. She accepted ₹ 14,000 in full settlement of her loan.
4. The stock of the book value of 20,000 was taken over by Sami and Usha in their profit-sharing ratio.
5. The firm paid realisation expenses amounting to ₹ 9,000 on behalf of Sami.
6. The firm had furniture ₹ 40,000. Usha took over 50% of the furniture at a discount of 10% and the remaining furniture was sold at a profit of 20% on book value.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
(i)	Realisation A/c   ...Dr.		7,000	−
	To Bank A/c		−	7,000
	(Being remaining amount paid to creditors through cheque)
(ii)	Bank A/с   ...Dr.		15,000	−
	To Realisation A/с		−	15,000
	(Being debtors written off as bad, realised ₹ 15,000)
(iii)	Usha’s Loan A/c   ...Dr.		16,000	−
	To Bank A/с		−	14,000
	To Realisation A/с		−	2,000
	(Being Usha’s loan repaid)
(iv)	Sami’s Capital A/c   ...Dr.		10,000	−
	Usha’s Capital A/c   ...Dr.		10,000	−
	To Realisation A/с		−	20,000
	(Being stock taken over by Sami and Usha is their profit-sharing ratio)
(v)	Sami’s Capital A/c   ...Dr.		9,000	−
	To Bank A/c		−	9,000
	(Being realisation expenses paid by the firm on behalf of Sami)
(vi)	Usha’s Capital A/c   ...Dr.		18,000	−
	Bank A/c   ...Dr.		24,000	−
	To Realisation A/c		−	42,000
	(Being 50% furniture taken over by Usha at 10% discount and the remaining sold at a profit of 20%)