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Tom Decided to Convert His Business into a Llp on 31.3.2017 When Balance Sheet Was as Follows : - Financial Accounting(Financial Accounting and Auditing 9)

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Numerical

Tom decided to convert his business into a LLP on 31.3.2017 when balance sheet was as follows :
Balance Sheet as on 31.3.2017

Liabilities Rs. Assets Rs.
Capital 4,50,000 Machinery 2,00,000
Creditors 2,00,000 Building 2,00,000
Reserve 30,000 Stock 1,80,000
Bank loan 2,28,000 Debtors 3,00,000
    Patents 20,000
    Cash 8,000
       
  9,08,000   9,08,000

Tom and Jerry will be forming a new LLP and decided to share profits equally.
Capital contribution in cash and each has to contribute '16,00',000.
Other terms & conditions :
(i) Machinery and building revalued at Rs. 2,40,000 and Rs. 2,70,000 respectively.
(ii) Creditors are to be paid-off by vendor immediately.
(iv)Other assets and liabilities are to be taken at book values.
(iv)The vendors were to-be settled by payment of Rs.14,00,000.
Prepare Realisation Ale in the books of Vendor. Prepare Journal Entries and Balance Sheet in the books of Tom and Jerry LLP.

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Solution

In the books of Tom (Vendor)
Realisation A/c

Particulars Rs Particulars Rs
To Sundry Assets :      
Machinery      
Building      
Stock      
Debtors      
Patents      
To Capital A/c      
       
       

 

Concept: Limited Liability Partnership Problems
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