Question

Pass the necessary journal entries for the following transactions on the dissolution of the firm of Sudha and Shiva after the various assets (other than cash and bank) and third party liabilities have been transferred to realisation account: 

1. Sudha agreed to pay off her husband's loan ₹ 19,000.
2. A debtor, whose debt of ₹ 9,300 was written off as bad debts in the books, paid ₹ 7,500 in full settlement.
3. Shiva took over all investments at ₹ 13,300.
4. An unrecorded creditor of ₹ 20,000 was paid by Sudha at a discount of 10%
5. The firm had 300 shares in Veligare Ltd. acquired at a cost of ₹ 3,000 and had been written off completely from the books. These shares were valued at ₹ 5 each and divided among the partners in their profit sharing ratio.
6. Realisation expenses ₹ 3,400 were paid by Sudha for which she was allowed a remuneration of ₹ 3,000.

Answer 1

Journal Entries
Date	Particulars	L.F.	Amount Dr.	Amount Cr.
(i)	Realisation A/c   ...Dr.		19,000	-
	To Sudha's Capital A/c		-	19,000
	(Loan paid by Sudha)
(ii)	Bank A/c   ...Dr.		7,500	-
	To Realisation A/c		-	7,500
	(Bad debts recovered)
(iii)	Shiva's Capital A/c   ...Dr.		13,300	-
	To Realisation A/c		-	13,300
	(Being Investment taken over by shiva)
(iv)	Realisation A/c   ...Dr.		18,000	-
	To Sudha's Capital A/c		-	18,000
	(Creditors paid by Sudha)
(v)	Sudha's Capital A/c   ...Dr.		750	-
	Shiva's Capital A/c   ...Dr.		750	-
	To Realization A/c		-	1,500
	(Shares taken by partners)
(vi) (a)	Realization A/c   ...Dr.		3,000	-
	To Sudha's Capital A/c		-	3,000
	(Being remuneration provided to Sudha)
(b)	Realization A/c   ...Dr.		3,400	-
	To Sudha's Capital A/c		-	3,400
	(Realization expenses paid by Sudha)