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प्रश्न
State the accounting treatment for :
Unrecorded liabilities
उत्तर
Accounting Treatment for Unrecorded Liabilities
Unrecorded liabilities are those liabilities which are not recorded in the books of account. The accounting treatment for unrecorded liability is:
a) When the unrecorded liability is paid off
Realisation A/c Dr.
To Cash A/c
(Unrecorded liability paid in cash)
b) When the unrecorded liability is taken over by a partner
Realisation A/c Dr.
To Partner's Capital A/c
(Unrecorded liability taken over by the partner)
APPEARS IN
संबंधित प्रश्न
Devendra of Ahmednagar and Mahendra of Pune entered into joint venture to consign goods to Virendra of Jalgaon to be sold on their joint risk, which is proportion of 4/5 and 1/5 respectively.
Mahendra sent goods worth Rs 6,00,000 paying carriage and freight Rs 9,500 and other expenses Rs 3,400.
The amount of discount, Rs 6,000 was to be treated as joint venture expense.
Virendra remitted Rs 11,00,000 to Devendra and the balance to Mahendra both by bank draft.
You are required to prepare Joint Venture A/c, Mahendra's A/c and Virendra's A/c in the books of Devendra.
Hitesh sold goods for Rs 4,500 to Ashok on 1.1.2010 and drew upon him a bill of exchange payable 2 months after sight. Ashok accepted the bill and returned the same to Hitesh. On the due date the bill was met by Ashok.
Record the necessary Journal entries in the books of Hitesh and also prepare Ashok account in his books.
1. When the bill was retained by Hitesh till the date of its maturity.
2. When Hitesh immediately discounted the bill @ 15% p.a. with his bank.
3. When three days before its maturity, the bill was sent by Hitesh to his bank for collection.
4. When the bill was endorsed immediately by Hitesh in favour of his creditor Venkat.
On 1st August, 2012 Omprakash drew a bill of Rs 10,000 for 60 days after date on Sharadchandra. On 15th August, 2012 Omprakash purchased goods from Hariprasad for Rs 12,000. On the same date Omprakash endorsed Sharadchandra’s bill in favour of Hariprasad and paid the balance by cheque at 1% cash discount. On the same date Hariprasad discounted the bill with his bank for Rs 9,500.
On the due date Sharadchandra honoured his acceptance presented by Hariprasad.You are required to pass journal entries in the books of Omprakash, Sharadchandra and Hariprasad.
Sushant owes Surekha Rs 1,25,000 Surekha draws a bill for Rs 1,00,000 on Sushant for 4 months period and received the cheque for the balance. The bill is duly accepted and returned by Sushant. On the same date Surekha endorsed Sushant’s acceptance to Suresh.
On the due date Suresh informed Surekha that Sushant dishonoured his acceptance and Rs 3,175 paid as noting charges Surekha then drew a new bill for 3 month on Sushant including noting charges and interest Rs 4,000. On the due date bill was duly honoured by Sushant.
Write Journal entries in the books of Surekha and prepare Surekha’s account in the books of Sushant.
On 1st Sept., 2010 Badrinath drew a bill of Rs 20,000 on Dinanath at 4 months. The bill was duly accepted by Dinanath. On 5th Sept., 2010 Badrinath endorsed the bill in favour of Somnath. However on 1st January, 2012 Dinanath approached to Badrinath and requested bill be renewed for a further period of 3 months at 15% p.a. Badrinath agreed and paid necessary money to Somnath. Before one month of the due date of the new bill Dinanath retired his acceptance @ 10% p.a.
Pass journal entries in the books Badrinath and Dinanath.
Journalise the following bill transactions in the books of Gopal as on 14th August, 2010.
1. Shruti’s acceptance to Gopal Rs 4,500 retired one month before due date at rebate 10% p.a.
2. Discounted 3 months acceptance of Chandrakant for Rs 3,500 with bank @ 12% p.a.
3. Received cheque Rs 2,000 and 2 months acceptance drawn on Sushama for Rs 10,000 for the balance due on her account.
4. Endorsed Shantaram’s acceptance at 2 months of Rs 5,000 in favour of Balchandra and paid cash Rs 2,500 in full settlement of this account Rs 7,800.
5. Sold goods of Rs 13,500 on credit to Nanda. Drew 2 months bill on her. Which is duly accepted and returned by her.
What journal entries would be recorded for the following transactions on the dissolution of a firm after various assets (other than cash) on the third party liabilities have been transferred to Reliasation Account.
1. Arti took over the Stock worth Rs 80,000 at Rs 68,000.
2. There was unrecorded Bike of Rs 40,000 which was taken over By Mr. Karim.
3. The firm paid Rs 40,000 as compensation to employees.
4. Sundry creditors amounting to Rs 36,000 were settled at a discount of 15%.
5. Loss on Realisation Rs 42,000 was to be distributed between Arti and Karim in the ratio of 3:4.
Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was:
Balance Sheet of Ashu and Harish as on December 31, 2017
| Liabilities | Amt (Rs.) | Amt (Rs.) | Assets | Amt (Rs.) |
| Capitals: | 162,000 | Building | 80,000 | |
| Ashu | 108,000 | Machinery | 70,000 | |
| Harish | 54,000 | Furniture | 14,000 | |
| Creditors | 88,000 | Stock | 20,000 | |
| Bank overdraft | 50,000 | Investments | 60,000 | |
| Debtors | 48,000 | |||
| Cash in hand | 8,000 | |||
| 300,000 | 300,000 |
Ashu is to take over the building at Rs 95,000 and Machinery and Furniture is take over by Harish at value of Rs 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs 46,000, expenses of Realisation amounted to Rs 3,000. Prepare necessary ledger Account.
Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was:
Balance Sheet of Ashu and Harish as on December 31, 2017
| Liabilities | Amt (Rs.) | Amt (Rs.) | Assets | Amt (Rs.) |
| Capitals: | 162,000 | Building | 80,000 | |
| Ashu | 108,000 | Machinery | 70,000 | |
| Harish | 54,000 | Furniture | 14,000 | |
| Creditors | 88,000 | Stock | 20,000 | |
| Bank overdraft | 50,000 | Investments | 60,000 | |
| Debtors | 48,000 | |||
| Cash in hand | 8,000 | |||
| 300,000 | 300,000 |
Ashu is to take over the building at Rs 95,000 and Machinery and Furniture is take over by Harish at value of Rs 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs 46,000, expenses of Realisation amounted to Rs 3,000. Prepare necessary ledger Account.
Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under:
Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017
|
Liabilities |
Amt (Rs.) |
Assets |
Amt (Rs.) |
||
|
Sundry Creditors |
20,000 |
Bank |
7,500 |
||
|
Bills payable |
25,500 |
Sundry Debtors |
58,000 |
||
|
Babu’s loan |
30,000 |
Stock |
39,500 |
||
|
Capital’s: |
1,52,000 |
Machinery |
48,000 |
||
|
Ashok |
70,000 |
Investment |
42,000 |
||
|
Babu |
55,000 |
Freehold Property |
50,500 |
||
|
Chetan |
27,000 |
|
|
||
|
Current Accounts : |
18,000 |
|
|||
|
Ashok |
10,000 |
|
|||
|
Babu |
5,000 |
|
|||
|
Chetan |
3,000 |
|
|||
|
|
|
2,45,500 |
|
2,45,500 |
|
The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.
Prepare Realisation Account, Partners Capital Account, Bank Account.
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1 respectively. The firm was dissolved on 1st March, 2013. After transferring assets (other than cash) and third party liabilities to the 'Realisation Account' you are provided with the following information:
(a) There was a balance of ₹ 18,000 in the firm's Profit and Loss Account.
(b) There was an unrecorded bike of ₹ 50,000 which was taken over by X.
(c) Creditors of ₹ 5,000 were paid ₹ 4,000 in full settlement of accounts.
Pass necessary Journal entries for the above at the time of dissolution of firm.
Aman and Harsh were partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and third party liabilities have been transferred to Realisation Account:
(a) There was furniture worth ₹ 50,000. Aman took over 50% of the furniture at 10% discount and the remaining furniture was sold at 30% profit on book value.
(b) Profit and Loss Account was showing a credit balance of ₹ 15,000 on the date of dissolution.
(c) Harsh's loan of ₹ 6,000 was discharged at ₹ 6,200.
(d) The firm paid realisation expenses amounting to ₹ 5,000 on behalf of Harsh who had to bear these expenses.
(e) There was a bill for 1,200 under discount. The bill was received from Soham who proved insolvent and a first and final dividend of 25% was received from his estate.
(f) Creditors, to whom the firm owed ₹ 6,000, accepted stock of ₹ 5,000 at a discount of 5% and the balance in cash.
Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account:
(a) Kunal agreed to pay off his wife's loan of ₹ 6,000.
(b) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹ 10,000 were given a piece of furniture costing ₹ 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.
(c) Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
(d) A machine which was not recorded in the books was taken over by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
(e) The firm had a debit balance of ₹ 15,000 in the Profit and Loss Account on the date of dissolution.
(f) Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.
Pass the Journal entries for the following transactions on the dissolution of the firm of P and Q after various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Stock ₹ 2,00,000. 'P' took over 50% of stock at a discount of 10%. Remaining stock was sold at a profit of 25% on cost.
(b) Debtors ₹ 2,25,000. Provision for Doubtful Debts ₹ 25,000. ₹ 20,000 of the book debts proved bad.
(c) Land and Building (Book value ₹ 12,50,000) sold for ₹ 15,00,000 through a broker who charged 2% commission.
(d) Machinery (Book value ₹ 6,00,000) was handed over to a creditor at a discount of 10%.
(e) Investment (Book value ₹ 60,000) realised at 125%.
(f) Goodwill of ₹ 75,000 and prepaid fire insurance of ₹ 10,000.
(g) There was an old furniture in the firm which had been written off completely in the books. This was sold for ₹ 10,000.
(h) 'Z' an old customer whose account for ₹ 20,000 was written off as bad in the previous year, paid 60%.
(i) 'P' undertook to pay Mrs. P's loan of ₹ 50,000.
(j) Trade creditors ₹ 1,60,000. Half of the trade creditors accepted Plant and Machinery at an agreed valuation of ₹ 54,000 and cash in full settlement of their claims after allowing a discount of ₹ 16,000. Remaining trade creditors were paid 90% in final settlement.
Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their partnership firm on 31st March, 2018. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm on 31st March, 2018 was as follows:
BALANCE SHEET as at 31st March, 2018
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
80,000 |
Building | 1,20,000 | ||
| Mrs. Pradeep's Loan | 40,000 | Investment | 30,600 | ||
| Rajesh's Loan |
24,000 |
Debtors |
34,000 |
|
|
| Investment Fluctuation Fund |
8,000 |
Less: Provision for Doubtful Debts |
4,000 |
30,000 |
|
| Capital A/cs: | Bills Receivable | 37,400 | |||
| Pradeep |
42,000 |
|
Bank | 6,000 | |
| Rajesh |
42,000 |
84,000 |
Profit and Loss A/c | 8,000 | |
|
|
|
Goodwill |
4,000 |
||
|
2,36,000 |
2,36,000 |
||||
Following terms and conditions were agreed upon:
(a) Pradeep agreed to pay off his wife's loan.
(b) Half of the debtors realised ₹ 12,000 and remaining debtors were used to pay off 25% of the creditors.
(c) Investment sold to Rajesh for ₹ 27,000.
(d) Building realised ₹ 1,52,000.
(e) Remaining creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.
(f) Bill receivables were settled at a loss of ₹ 1,400.
(g) Realisation expenses amounted to ₹ 2,500.
Prepare Realisation Account.
A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. They decided to dissolve their firm on 31st March, 2019 when the Balance Sheet was:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
40,000 |
Cash |
40,000 |
||
| Bills Payable |
46,000 |
Debtors |
70,000 |
||
| Employees’ Provident Fund |
32,000 |
Less: Provision for Doubtful Debts |
6,000 |
64,000 |
|
| Mrs. A’s Loan |
38,000 |
Stock |
50,000 |
||
| C’s Loan |
30,000 |
Investments |
60,000 |
||
| Investments Fluctuation Reserve |
16,000 |
Furniture |
42,000 |
||
| Capitals A/cs: | Machinery |
1,36,000 |
|||
| A |
1,20,000 |
Land |
1,00,000 |
||
| B |
1,00,000 |
Goodwill |
30,000 |
||
| C |
1,00,000 |
3,20,000 |
|||
|
5,22,000 |
5,22,000 |
||||
Following transactions took place:
(a) A took over Stock at ₹ 36,000. He also took over his wife's loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value. Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.
Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decide to dissolve the firm on 31st March, 2019 at which date their Balance Sheet stood as:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Bank Loan |
1,500 |
Trademarks |
1,200 |
||
|
Creditors for Goods |
8,000 |
Machinery |
12,000 |
||
|
Bills Payable |
500 |
Furniture |
400 |
||
|
Capital A/cs: |
Stock |
6,000 |
|||
|
Krishna |
16,000 |
Debtors |
9,000 |
||
|
Arjun |
6,000 |
22,000 |
Less: Provision for Bad Debts |
400 |
8,600 |
|
Cash at Bank |
2,800 |
||||
|
Advertisement Suspense |
1,000 |
||||
|
32,000 |
32,000 |
||||
The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks realised ₹ 800.
(d) Machinery and Stock-in-Trade were taken by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2019, A's Capital and B's Capital were ₹ 30,000 and ₹ 20,000 respectively but C owed ₹ 5,000 to the firm. The liabilities were ₹ 20,000. The assets of the firm realised ₹ 50,000.
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.
X, Y and Z entered into a partnership and contributed ₹ 9,000; ₹ 6,000 and ₹ 3,000 respectively. They agreed to share profits and losses equally. The business lost heavily during the very first year and they decided to dissolve the firm. After realising all assets and paying off liabilities, there remained a cash balance of ₹ 6,000.
Prepare Realisation Account and Partner's Capital Accounts.
X and Y were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve the firm on 31st March, 2019. On that date, their Capitals were X − ₹ 40,000 and Y − ₹ 30,000. Creditors amounted to ₹ 24,000.
Assets were realised for ₹ 88,500. Creditors of ₹ 16,000 were taken over by X at ₹ 14,000. Remaining Creditors were paid at ₹ 7,500. The cost of realisation came to ₹ 500.
Prepare necessary accounts.
