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Question 14 Chapter 7 of +2-A
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14. 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 Realization 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 Bookvalue 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.
The solution of Question 14 Chapter 7 of +2-A: –
| Date | Particulars | L.F. | Debit | Credit | |
| a | P’s Capital A/c | Dr. | 90,000 | ||
| Bank A/c | Dr. | 1,25,000 | |||
| To Realization A/c | 2,15,000 | ||||
| (Being Stock realized) | |||||
| b | Bank A/c | Dr. | 2,05,000 | ||
| To Realization A/c | 2,05,000 | ||||
| (Being Debtors realized) | |||||
| c | Bank A/c | Dr. | 14,70,000 | ||
| To Realization A/c | 14,70,000 | ||||
| ( Being Land and Building realized) | |||||
| d | No Entry | ||||
| e | Bank A/c | Dr. | 75,000 | ||
| To Realization A/c | 75,000 | ||||
| (Being Investment realized) | |||||
| f | No Entry | ||||
| g | Bank A/c | Dr. | 10,000 | ||
| To Realization A/c | 10,000 | ||||
| (Being Unrecorded furniture realized) | |||||
| h | Bank A/c | Dr. | 12,000 | ||
| To Realization A/c | 12,000 | ||||
| (Being Bad debts recovered) | |||||
| i | Realization A/c | Dr. | 50,000 | ||
| To P’s Capital A/c | 50,000 | ||||
| (Being Wife ′s loan paid by partner) | |||||
| j | Realization A/c | Dr. | 82,000 | ||
| To Bank A/c 10, 000 +72, 000 | 82,000 | ||||
| (Being Creditors paid) | |||||
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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
