Question

Pass Journal entries for the following at the time of dissolution of a firm:
(a) Sale of Assets − ₹ 50,000.
(b) Payment of Liabilities − ₹ 10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to ₹ 15,000. The firm had agreed with Amrit, a partner, to reimburse him up to ₹ 10,000.
(e) Z, an old customer, whose account for ₹ 6,000 was written off as bad in the previous year, paid 60% of the amount written off.
(f) Investment (Book Value ₹ 10,000) realised at 150%.

Answer 1

Journal

S.N.	Particulars		L.F.	Debits Amount Rs	Credit Amount Rs
(a)	Cash A/c	Dr.		50,000
	To Realisation A/c				50,000
	(Assets realized for cash)
(b)	Realisation A/c	Dr.		10,000
	To Cash A/c				10,000
	(Payment of liabilities made)
(c)	Realisation A/c	Dr.		2,500
	To X’s Capital A/c				2,500
	(5% commission allowed to Mr. X’s on sale of assets of Rs 50,000)
(d)	Realisation A/c	Dr.		10,000
	To Amrit’s Capital A/c				10,000
	(Amrit was allowed remuneration on account of realisation)
	Amrit’s Capital A/c	Dr.		15,000
	To Cash A/c				15,000
	(Realisation expenses paid on behalf of amrit)
	Alternatively, only one single entry can also be passed instead of above two entries.
	Realisation A/c	Dr.		10,000
	Amrit’s Capital A/c	Dr.		5,000
	To Cash A/c				15,000
	(Realisation expenses paid)
(e)	Cash A/c	Dr.		3,600
	To Realisation A/c				3,600
	(60% of  the Bad debts against Z an old customer now recovered)
(f)	Cash A/c	Dr.		15,000
	To Realisation A/c				15,000
	(Investments are realised at 150%)