Question

Pravin decided to convert his Business into LLP on 31.3.2015.
The Balance Sheet of Pi·aviri as on 31.3.2015 .

Balance Sheet of Pravin as on 31.3.2015

Liabilities	Rs.	Assets	Rs.
Sundry Creditors	35,000	Machinery
Bills Payable	5,000	Furniture
Praveen's Capital	90,000	Stock
		Debtors
		Cash
	1,30,000		1,30,000

Praveen and Pniful will be partners in  LLP sharing profit in the ratio of 3 : 2 respectively. Capital is to be contributed in Cash as Praveen Rs. 1,40,000 and Praful Rs.1,00,000.
Other terms and conditions :
(i) Goodwill. valued at Rs . 30,000.
(ii) Machinery is to be valued at Rs . 60,000.
(iii) Creditors are to be paid at discount of 2% 
(iv) Realisation expenses incurred and paid Rs, 500 and borne by vendor.
(v) Other assts and liabilities are to be taken at book value.
(1) Prepare necessary ledgers in the books of Praveen.
(2) Provide necessary journal entries in the books of LLP.
(3) Prepare Balance Sheet of LLP.

Answer 1

Statement of Purchase Consideration

Particulars	Rs.
(1) Assets Taken Over:
Machinery	60,000
Furniture	10,000
Stock	25,000
Debtors	35,000
Goodwill	30,000
	1,60,000
Less : Liabilities taken over :
Bills Payable	5,000
Purchase Consideration	1,55,000

In the books of praveen 
Realisation A/c 

Particulars	Rs	Particulars	Rs
To Sundry Assets	1,20,000	By Sundry Liabilities :
To Cash/Bank A/c (Creditors)	34,300	Creditors	35,000
To Cash/Bank A/c	500	Bill Payable	5000
To Capital A/c (Realisation Expenses)	40,200	By Cash/Bank A/c (LLP)	1,55,000
	1,95,000		1,95,000

Capital A/c 

Particulars	Rs.	Particulars	Rs
To Cash/Bank A/c	1,30,200	By Bal b/d	90,000
		By Realisation A/c	40,200
	1,30,200		1,30,200

Cash/Bank A/c

Particulars	Rs.	Particulars	Rs.
To Bal b/d	10,000	By Realisation A/c
To Realisation A/c	1,55,000	(Creditors)	34,300
(LLP)		By Realisation A/c	500
		(Expenses)
		By Capital A/c	1,30,200
	1,65,000		1,65,000

In the Books of Praveen and Praful LLP
Journal Entries (31.3.2015)

No.	Particulars	L/F	Dr.	Cr.
1.	Business Purchase A/c Dr		1,55,000	-
	To Vendor's A/c		-	1,55,000
	(Being business purchase recorded)
2.	Machinery A/c          Dr		60,000
	Furniture A/c            Dr		10,000
	Stock    A/c               Dr		25,000
	Debtors A/c              Dr		35,000
	Goodwill A/c             Dr		30,000
	To Bills Payable		-	5,000
	To Business Purchase		-	1,55,000
	(Being assets and liabilities taken over)
3.	Bank A/c                  Dr		2,40,000
	To Praveen's Account A/c		-	1,40,000
	To Praful's Account A/c		-	1,00,000
	(Being capital contributed)
4.	Vendor's A/c             Dr		1,55,000	-
	To Bank A/c		-	1,55,000
	(Being purchase consideration discharged)

Part B : Stateinent of Account
Statement of Assets and Liabilities of Praveen and Praful LLP as on 31.3.2015

	Particulars	Figures as at the end of the current reporting period
I.	Contribution and Liabilities :	-
1.	Partner's Fund :	-
	(a) Contribution	2,40,000
	(b) Reserve and Surplus	-
2.	Liabilities :	-
	(a) Secured Loan	-
	(b) Unsecured Loan	-
	(c) Short-term Borrowings	-
	(d) Creditors I Trade·Payables	5,000
	(e) Advance from Customers	-
	(t) Other Liabilities (to specify)	-
	(g) Provisions : (i) For Txation	-
	(ii) For Contingencies	-
	(iii) For Insurance	-
	(iv) Other Provision (if any)	-
	Total	2 .45. 000
II.	Assets
	(a) Fixed Assets	1,00,000
	(b) Investinents	-
	(c) Loans & Advances	-
	( d) Inventories	25,000
	(e) Debtors / trade Receivables	35,000
	(t) Cash and Cash Equivalents	85,000
	(g) Other Assets (to specify)	-
		2,45,000