Question

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.

Answer 1

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