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Question
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.
Solution
Books of Gopal
Journal Entry
| Date | Particulars | L.F. | Debit Amount (Rs.) | Credit Amount (Rs.) |
| 2010 Aug.14 1. |
Cash/Bank A/c Dr. Rebate A/c Dr. To Bill Receivable A/c (Bill retired under the rebate of 10% Per annum, one before the due date.) |
4,462 38 |
4,500 | |
| Aug.14 2. |
Bank A/c Dr. Discount A/c Dr. To Bills receivable A/c (Bills discounted with bank @ 12% per annum before 3 months) |
3,395 105 |
3,500 | |
| Aug.14 3. |
Bank A/c Dr. Bills Receivable A/c Dr. To Sushama A/c (Cheque received for Rs.20,000 and for Rs.10,000 bill has been drawn and accepted) |
2,000 10,000 |
12,000 | |
| Aug.14 4. |
Balchandra A/c Dr. To Cash A/c To Discount Receivable A/c To Bills Receivable A/c ( Cash of Rs. 2,000 paid and bill for Rs. 5,000 endoresed to Balchandra, a creditor, in full settlement of his account of Rs.7,800) |
7,800 | 2,000 800 5,000 |
|
| Aug.14 5. |
Nanda A/c Dr. To Sales A/c (Goods sold to Nanda on credit) |
13,500 | 13,500 | |
| Aug.14 | Bills Receivable A/c Dr. To Nanda A/c (Bill drawn and accepted) |
13,500 | 13,5000 |
APPEARS IN
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[b] Realisation expenses amounting to Rs 3,000 were paid by Ashok, one of the partners.
[c] Realisation expenses Rs 2,300 borne by Tarun, personally.
[d] Amit, a partner was appointed to realise the assets, at a cost of Rs 4,000. The actual amount of Realisation amounted to Rs 3,000.
What journal entries will be recorded for the following transactions on the dissolution of a firm:
[a] Payment of unrecorded liabilities of Rs 3,200.
[b] Stock worth Rs 7,500 is taken by a partner Rohit.
[c] Profit on Realisation amounting to Rs 18,000 is to be distributed between the partners Ashish and Tarun in the ratio of 5:7.
[d] An unrecorded asset realised Rs 5,500.
How will you deal with the Realisation expenses of the firm of Rashim and Bindiya in the following cases
1. Realisation expenses amounts to Rs 1,00,000,
2. Realisation expenses amounting to Rs 30,000 are paid by Rashim, a partner.
3. Realisation expenses are to be borne by Rashim for which he will be paid Rs 70,000 as remuneration for completing the dissolution process. The actual expenses incurred by Rashim were Rs 1,20,000.
All partners wish to dissolve the firm. Yastin, a partner wants that her loan of Rs 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.
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.
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Balance Sheet of Surjit and Rahi as on March 31, 2017
| Liabilities | Amt (Rs.) | Assets | Amt (Rs.) |
| Creditors | 38,000 | Bank | 11,500 |
| Mrs. Surjit loan | 10,000 | Stock | 6,000 |
| Reserve | 15,000 | Debtors | 19,000 |
| Rahi’s loan | 5,000 | Furniture | 4,000 |
| Capital’s: | Plant | 28,000 | |
| Surjit | 10,000 | Investment | 10,000 |
| Rahi | 8,000 | Profit and Loss | 7,500 |
| 86,000 | 86,000 |
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1. Surjitagreed to take the investments at Rs 8,000 and to pay Mrs. Surjit’s loan.
2. Other assets wererealisedas follows:
| Stock | Rs. 5,000 |
| Debtors | Rs. 18,500 |
| Furniture | Rs. 4,500 |
| Plant | Rs. 25,000 |
3. Expenses onRealisationamounted to Rs 1,600.
4. Creditors agreed to accept Rs 37,000 as a final settlement.
You are required to prepare Realisation Account, Partners’ Capital Account and Bank Account.
Anup and Sumit are equal partners in a firm. They decided to dissolve the partnership on December 31, 2017. When the balance sheet is as under:
Balance Sheet of Anup and Sumit as on December 31, 2017
| Liabilities | Amt (Rs.) | Amt (Rs.) |
Assets | Amt (Rs.) |
| Sundry Creditors | 27,000 | Cash at bank | 11,000 | |
| Reserve fund | 10,000 | Sundry Debtors | 12,000 | |
| Loan | 40,000 | Plants | 47,000 | |
| Capital : | 120,000 | Stock | 42,000 | |
| Anup | 60,000 | Leasehold land | 60,000 | |
| Sumit | 60,000 |
Furniture |
25,000 | |
| 197,000 | 197,000 |
The Assets were realised as follows:
| Rs. | |
| Lease hold land | 72,000 |
| Furniture | 22,500 |
| Stock | 40,500 |
| Plant | 48,000 |
| Sundry Debtors | 10,500 |
The Creditors were paid Rs 25,500 in full settlement. Expenses of Realisation amount to Rs 2,500.
Prepare Realisation Account, Bank Account, Partners Capital Accounts to close the books of the firm.
Sanjay, Tarun and Vineet shared profit in the ratio of 3:2:1. On December 31,2017 their balance sheet was as follows:
Balance Sheet of Sanjay, Tarun and Vineet as on December 31, 2017
| Liabilities | Amt (Rs.) |
Amt (Rs.) |
Assets | Amt (Rs.) |
| Capitals: | 270,000 | Plant | 90,000 | |
| Sanjay | 100,000 | Debtors | 60,000 | |
| Tarun | 100,000 | Furniture | 32,000 | |
| Vineet | 70,000 | Stock | 60,000 | |
| Creditors | 80,000 |
Investments |
70,000 | |
| Bills payable | 30,000 | Bills receivable | 36,000 | |
| Cash in hand | 32,000 | |||
| 380,000 | 380,000 |
On this date the firm was dissolved. Sanjay was appointed to realise the assets. Sanjay was to receive 6% commission on the sale of assets (except cash) and was to bear all expenses of Realisation.
Sanjay realised the assets as follows: Plant Rs 72,000, Debtors Rs 54,000, Furniture Rs 18,000, Stock 90% of the book value, Investments Rs 76,000 and Bills receivable Rs 31,000. Expenses of Realisation amounted to Rs 4,500.
Prepare Realisation Account, Capital Accounts and Cash Account
The following is the Balance Sheet of Gupta and Sharma as on December 31,2017:
Balance Sheet of Gupta and Sharma as on December 31, 2017
| Liabilities | Amt (Rs.) |
Amt (Rs.) |
Assets | Amt (Rs.) |
| Sundry Creditors | 38,000 | Cash at Bank | 12,500 | |
| Mrs.Gupta’s loan | 20,000 | Sundry Debtors | 55,000 | |
| Mrs.Sharma’s loan | 30,000 | Stock | 44,000 | |
| Reserve fund | 6,000 | Bills Receivable | 19,000 | |
| Provision of doubtful debts | 4,000 | Machinery | 52,000 | |
| Investment | 38,500 | |||
| Capital : | 150,000 | Fixtures | 27,000 | |
| Gupta | 90,000 | |||
| Sharma | 60,000 | |||
| 248,000 | 248,000 |
The firm was dissolved on December 31, 2017 and asset realised and settlements of liabilities as follows:
(a) The Realisation of the assets were as follows:
| Rs. | |
| Sundry Debtors | 52,000 |
| Stock | 42,000 |
| Bills receivable | 16,000 |
| Machinery | 49,000 |
(b) Investment was taken over by Gupta at agreed value of Rs 36,000 and agreed to pay of Mrs. Gupta’s loan.
(c) The Sundry Creditors were paid off less 3% discount.
(d) The Realisation expenses incurred amounted to Rs 1,200.
Journalise the entries to be made on the dissolution and prepare Realisation Account, Bank Account and Partners Capital Accounts.
The following is the Balance sheet of Tanu and Manu, who shares profit and losses in the ratio of 5:3, On December 31,2017:
Balance Sheet of Tanu and Manu as on December 31, 2017
| Liabilities | Amt (Rs.) | Amt (Rs.) | Assets | Amt (Rs.) |
|
Sundry Creditors |
|
62,000 |
Cash at Bank |
16,000 |
|
Bills Payable |
|
32,000 |
Sundry Debtors |
55,000 |
|
Bank Loan |
|
50,000 |
Stock |
75,000 |
|
Reserve fund |
|
16,000 |
Motor car |
90,000 |
|
Capital: |
|
|
Machinery |
45,000 |
|
Tanu |
1,10,000 |
|
Investment |
70,000 |
|
Manu |
90,000 |
2,00,000 |
Fixtures |
9,000 |
|
|
|
3,60,000 |
|
3,60,000 |
On the above date the firm is dissolved and the following agreement was made: Tanu agree to pay the bank loan and took away the sundry debtors. Sundry creditors accepts stock and paid Rs 10,000 to the firm. Machinery is taken over by Manu for Rs 40,000 and agreed to pay of bills payable at a discount of 5%.. Motor car was taken over by Tanu for Rs 60,000. Investment realised Rs 76,000 and fixtures Rs 4,000. The expenses of dissolution amounted to Rs 2,200.
Prepare Realisation Account, Bank Account and Partners Capital Accounts.
Pass Journal entries for the following:
(a) Realisation expenses of ₹ 15,000 were to be met by Rahul, a partner, but were paid by the firm.
(b) Ramesh, a partner, was paid remuneration of ₹ 25,000 and he was to meet all expenses.
(c) Anuj, a partner, was paid remuneration of ₹ 20,000 and he was to meet all expenses. Firm paid an expense of ₹ 5,000.
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.
Lal and Pal were partners in a firm sharing profits in the ratio of 3 : 7. On 1st April, 2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to Realisation Account, you are given the following information:
(a) A creditor of ₹ 3,60,000 accepted machinery valued at ₹ 5,00,000 and paid to the firm ₹ 1,40,000.
(b) A second creditor for ₹ 50,000 accepted stock at ₹ 45,000 in full settlement of his claim.
(c) A third creditor amounting to ₹ 90,000 accepted ₹ 45,000 in cash and investments worth ₹ 43,000 in full settlement of his claim.
(d) Loss on dissolution was ₹ 15,000.
Pass necessary Journal entries for the above transactions in the books of firm assuming that all payments were made by cheque.
Shilpa, Meena and Nanda decided to dissolve their partnership on 31st March, 2019. Their profit-sharing ratio was 3 : 2 : 1 and their Balance Sheet was as under:
BALANCE SHEET OF SHILPA, MEENA AND NANDA as at 31st March, 2019
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Land | 81,000 | ||
| Shilpa | 80,000 | Stock | 56,760 | |
| Meena | 40,000 | 1,20,000 | Debtors | 18,600 |
| Bank Loan | 20,000 | Nanda's Capital | 23,000 | |
| Creditors | 37,000 | Cash | 10,840 | |
| Provision For Doubtful Debts | 1,200 | |||
| General Reserve | 12,000 | |||
| 1,90,200 | 1,90,200 | |||
It is agreed as follows:
The stock of value of ₹ 41,660 are taken over by Shilpa for ₹ 35,000 and she agreed to discharge bank loan. The remaining stock was sold at ₹ 14,000 and debtors amounting to ₹ 10,000 realised ₹ 8,000. Land is sold for ₹ 1,10,000. The remaining debtors realised 50% at their book value. Cost of realisation amounted to ₹ 1,200. There was a typewriter not recorded in the books worth of ₹ 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account, Partners' Capital Accounts, and Cash Account to Close the books of the firm.
Yogesh and Naresh were partners sharing profits equally. They dissolved the firm on 1st April, 2019. Naresh was assigned the responsibility to realise the assets and pay the liabilities at a remuneration of ₹10,000 including expenses. Balance Sheet of the firm as on that date was as follows:
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 40,000 | Cash/Bank | 6,000 | ||
| Bills Payable | 40,000 | Investments | 30,000 | ||
| Naresh's Loan | 44,000 | Debtors | 40,000 | 36,000 | |
| Mrs. Yogesh's Loan | 42,000 | Less: Provision for Doubtful Debts | 4,000 | ||
| Investment Fluctuation Reserve | 8,000 | Bills Receivable | 33,400 | ||
| Capital A/cs: | 42,000 | Profit and Loss A/c | 1,10,600 | ||
| Yogesh | 21,000 | ||||
| Naresh | 21,000 | ||||
| 2,16,000 | 2,16,000 |
The firm was dissolved on following terms:
- Yogesh was to pay his wife's loan.
- Debtors realised ₹ 30,000.
- Naresh was to take investments at an agreed value of ₹ 26,000.
- Creditors and Bills Payable were payable after two months but were paid immediately at a discount of 15% p.a.
- Bills Receivable were received allowing 5% rebate.
- A Debtor previously written off as Bad Debt paid ₹ 15,000.
- An unrecorded asset realised ₹10,000.
Prepare Realisation Account, Partners' Capital Accounts, Partners' Loan Account and Cash/Bank Account.
Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2019, their Balance Sheet was:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Creditors | 50,000 | Cash | 60,000 | |
| Bank Loan | 35,000 | Debtors | 75,000 | |
| Employees' Provident Fund | 15,000 | Stock | 40,000 | |
| Investments Fluctuation Reserve | 10,000 | Investments | 20,000 | |
| Commission Received in Advance | 8,000 | Plant | 50,000 | |
| Capital A/cs: | Profit and Loss A/c | 3,000 | ||
| Anju | 50,000 | |||
| Manju | 50,000 | |||
|
Sanju |
30,000 | 1,30,000 | ||
| 2,48,000 | 2,48,000 | |||
On this date, the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
Anju realised the assets as follows: Debtors ₹ 60,000; Stock ₹ 35,500; Investments ₹ 16,000; Plant 90% of the book value. Expenses of Realisation amounted to ₹ 7,500. Commission received in advance was returned to customers after deducting ₹ 3,000.
Firm had to pay ₹ 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to ₹ 17,000. This liability was not provided for in the above Balance Sheet. ₹ 20,000 had to be paid for Employees' Provident Fund.
Prepare Realisation Account, Capital Accounts of Partners and Cash Account.
There are two partners X and Y in a firm and their capitals are ₹ 50,000 and ₹ 40,000. The creditors are ₹ 30,000. The assets of the firm realise ₹ 1,00,000. How much will X and Y receive?
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.
