Question

Pass the necessary journal entries for the following transactions on the dissolution of the firm of Abhay and Mansi after various assets (other than cash) and third party liabilities have been transferred to Realisation Account:

1. Abhay took over stock worth ₹ 67,000 at ₹ 56,000.
2. There was an old computer which had been written off completely from the books. It was estimated to realise ₹ 4,000. It was taken away by Mansi at the estimated price less 10%.
3. Unrecorded liabilities of ₹ 7,500 were settled at ₹ 5,000.
4. Realisation expenses amounting to ₹ 8,000 were paid by Abhay.
5. Investment, whose face value was ₹ 15,000, was realized at 40%.
6. Profit on realisation ₹ 24,000 was to be distributed between Abhay and Mansi in their profit sharing ratio which was 2 : 1.

Answer 1

Journal Entries
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
i.	Abhay's Capital A/c   ...Dr.		56,000
	To Realisation A/c			56,000
	(Being stock taken by Abhay)
ii.	Mansi's Capital A/c   ...Dr.		3,600
	To Realisation A/c			3,600
	(Being Computer taken by Mansi)
iii.	Realisation A/c   ...Dr.		5,000
	To Bank A/c			5,000
	(Being unrecorded liabilities settled)
iv.	Realisation A/c   ...Dr.		8,000
	To Abhay's Capital A/c			8,000
	(Being realization expenses paid by Ajay)
v.	Bank A/c   ...Dr.		6,000
	To Realisation A/c			6,000
	(Being investments realised at 40%)
vi.	Realisation A/c   ...Dr.		24,000
	To Abhay's Capital A/c			16,000
	To Mansi's Capital A/c			9,000
	(Being profit on realisation distributed)