Question 19 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 19 Chapter 7 of +2-A

Question 19 Chapter 7 of +2-A

19. Achal and Vishal were partners in firm sharing profits in the ratio of 3: 5 . On 31st March 2018 their Balance Sheet was as follows:

Liabilities   Amount Assets Amount
Capital A/cs:     Land and Building 4,00,000
Acha 3,00,000   Machinery 3,00,000
Vichal 5,00,000 8,00,000 Debtors 2,22,000
Creditors A/c   1,79,000 Cash at Bank 78,000
Employees’ Provident Fund A/c   21,000    
         
    10,00,000   10,00,000


The firm was dissolved on 1st April 2018 and the Assets and Liabilities were settled as follows :
a Land and Building b realised 4,30,000.
b Debtors realised 2,25,000 with interest and 1,000 were recovered for Bad Debts written off last year.
c There was an Unrecorded Investment which was sold for 25,000.
d Vichal took over Machinery at 2,80,000 for cash. e 50% of the Creditors were paid 4,000 less in full settlement and the remaining Creditors were paid the full amount.
Pass necessary journal entries for dissolution of the firm

 

The solution of Question 19 Chapter 7 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  Realization A/c Dr.   9,22,000  
  To Land & Building A/c       4,00,000
  To Machinery A/c       3,00,000
  To Debtors A/c       2,22,000
  (Being assets transferred)      
  Creditors A/c Dr.   1,79,000  
  Employees’ Provident Fund A/c Dr.   21,000  
  To Realization A/c       2,00,000
  (Being liabilities transferred)        
  Bank A/c Dr.   4,30,000  
  To Realization A/c       4,30,000
  (Being Land & Building realized)        
  Bank A/c 2, 25, 000 +1, 000 Dr.   2,26,000  
  To Realization A/c       2,26,000
  (Being Debtors realized along −with Bad −debts recovered)        
  Bank A/c Dr.   25,000  
  To Realization A/c       25,000
  (Being Unrecorded Investments sold)        
  Bank A/c Dr.   2,80,000  
  To Realization A/c       2,80,000
  (Being Machinery took over by Vichal for Cash)        
  Realization A/c Dr.   1,96,000  
  To Bank A/c 85, 500 +89, 500 +21, 000       1,96,000
  (Being Remuneration paid)        
  Realization A/c Dr.   43,000  
  To Achal’s Capital A/c       16,125
  To Vichal’s Capital A/c       26,875
  (Being profits on realization transferred)        
  Achal’s Capital A/c Dr.   3,16,125  
  Vichal’s Capital A/c Dr.   5,26,875  
  To Bank A/c       8,43,000
  (Being Partners paid off)        

 

 

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)

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

 

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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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