Question 04 Chapter 7 of +2 Part-1 - USHA Publication 12 Class Part

Question 04 Chapter 7 of +2-Part-1

4. (Journal Entries) A firm of partner C and D sharing profits in 3:2 ratio was dissolve. The following balance appeared in the books:

General Reserve Rs. 10,000
Reserve Fund Rs. 8,000
Profit and Loss A/c (Dr.) Rs. 20,000
Advertisement Suspense A/c Rs. 5,000
Partner C’s loan 10,000 was paid by the firm in cash .
Loan Rs. 25,000 given by ‘D’ to the firm was transferred to his capital account .
You are required to pass journal entries.

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The solution of Question 04 Chapter 7 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
a&b)	General Reserve A/c	Dr.		10,000
	Reserve Fund A/c	Dr.		8,000
	To C’s capital A/c				10,800
	To D’s capital A/c				7,200
	(Being reserve credited in 3:2)

c&d)	C’s capital A/c	Dr.		15,000
	D’s capital A/c	Dr.		10,000
	To profit & loss A/c				20,000
	To Advertisement suspense A/c				5,000
	(Being losses debited to partners in3:2)

e)	C’s loan A/c	Dr.		10,000
	To Cash A/c				10,000
	(Being creditors paid off at 5 % discount on dissolution )

f)	D’s loan A/c	Dr.		25,000
	To Cash A/c				25,000
	(Being realisation expense paid off )