Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs 3,000,
2. Ashish, an old customer whose Account for Rs 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of Rs 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize Rs 400. It was taken away by Priya at an estimated price less 25%,
5. There were 100 shares of Rs 10 each in Star Limited acquired at a cost of Rs 2,000 which had been written-off completely from the books. These shares are valued @ Rs 6 each and divided among the partners in their profit sharing ratio.
Solution
Books of Paras and Priya
Journal Entries
| Particulars | L.F. |
Amount (Rs.) |
Amount (Rs.) | |
| 1) | Bank A/c Dr. To Realisation A/c (Unrecorded furniture sold) |
3,000 | 3,000 | |
| 2) | Bank A/c Dr. To Realisation A/c (Bad Debt recovered which was previously written off as bad) |
600 | 600 | |
| 3) | Paras’s Capital A/c Dr. To Realisation A/c (Unrecorded goodwill taken over by Paras) |
30,000 | 30,000 | |
| 4) | Priya’s Capital A/c Dr. To Realisation A/c (Unrecorded Typewriter estimated Rs 400 taken over by Priya at 25% less price) |
300 | 300 | |
| 5) | Paras’s Capital A/c Dr. Priya’s Capital A/c Dr. To Realisation A/c (100 shares of Rs 10 each which were not recorded in the books taken @ Rs 6 each by Paras and Priya and divided between them in their profit sharing ratio) |
300 300 |
600 |
