Check sibling questions

Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm on 31st March 2021. Pass necessary journal entries for the following transactions after various assets (other than cash) and third-party liabilities have been transferred to realization account:

(i) Old machine fully written off was sold for ₹ 42,000 while a payment of ₹ 6,000 is made to bank for a bill discounted being dishonoured.

(ii) Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque, against the payment of his loan to the firm of ₹1,00,000.

(iii) Stock of book value of ₹30,000 was taken by Madhav, Madhusudan and Mukund in their profit sharing ratio.

(iv) The firm had paid realization expenses amounting to ₹5,000 on behalf of Mukund.

(v) There was a vehicle loan of ₹ 2,00,000 which was paid by surrender of asset to the bank at an agreed value of ₹ 1,40,000 and the shortfall was met from firm’s bank account.

 

Answer

                                                   Journal
Date Particulars L.F Dr (Amount) Cr (Amount)
(i) Bank Dr   42000  
             To Realisation A/c     42000
  (Machine not existing in books sold)      
         
  Realisation A/c  Dr   6000  
             To Bank A/c     6000
  (Amount paid to Bank for Bill Discounted being dishonoured)      
         
(ii) Madhusudan's Loan A/c  Dr   100000  
                  To Realisation A/c     75000
                  To bank A/c     25000
  (Madhusudhan's loan settled)      
         
(iii) Madhav's Capital A/c     Dr   10000  
  Madhusudan's Capital A/c     Dr   10000  
  Mukund's Capital A/c   Dr   10000  
             To Realisation A/c     30000
  (Unrealised stock taken by partners)      
         
(iv) Mukund's Capital A/c   Dr   5000  
           To Bank A/c     5000
  (Realisation expenses paid on behalf of Mukund's Capital)      
         
(v) Realisation A/c  Dr   60000 (200000-140000)  
             To Bank A/c     60000
  (Vehicle Loan remaining amount paid)      

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Transcript

Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm on 31st March 2021. Pass necessary journal entries for the following transactions after various assets (other than cash) and third-party liabilities have been transferred to realization account: (i) Old machine fully written off was sold for ₹ 42,000 while a payment of ₹ 6,000 is made to bank for a bill discounted being dishonoured. (ii) Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque, against the payment of his loan to the firm of ₹1,00,000. (iii) Stock of book value of ₹30,000 was taken by Madhav, Madhusudan and Mukund in their profit sharing ratio. (iv) The firm had paid realization expenses amounting to ₹5,000 on behalf of Mukund. (v) There was a vehicle loan of ₹ 2,00,000 which was paid by surrender of asset to the bank at an agreed value of ₹ 1,40,000 and the shortfall was met from firm’s bank account. Answer Journal Date Particulars L.F Dr (Amount) Cr (Amount) (i) Bank Dr 42000 To Realisation A/c 42000 (Machine not existing in books sold) Realisation A/c Dr 6000 To Bank A/c 6000 (Amount paid to Bank for Bill Discounted being dishonoured) (ii) Madhusudan's Loan A/c Dr 100000 To Realisation A/c 75000 To bank A/c 25000 (Madhusudhan's loan settled) (iii) Madhav's Capital A/c Dr 10000 Madhusudan's Capital A/c Dr 10000 Mukund's Capital A/c Dr 10000 To Realisation A/c 30000 (Unrealised stock taken by partners) (iv) Mukund's Capital A/c Dr 5000 To Bank A/c 5000 (Realisation expenses paid on behalf of Mukund's Capital) (v) Realisation A/c Dr 60000 To Bank A/c 60000 (Vehicle Loan remaining amount paid)

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Davneet Singh

Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.