Nisha, Kamal and Vijay has an automobile spare parts business. Due to strained relationship among the partners, they were unable to take collective decisions for the growth of business. As a result, firm has been in losses for the last 3 years. The partners decided to dissolve the firm.
Following transactions took place at the time of dissolution:
- Shiv, a creditor, to whom ₹ 6,000 were due, accepted office equipment at ₹ 4,000 and the balance was paid to him.
- Investment, which appeared in the book at ₹ 1,00,000, half of it is taken by Mohan, a creditor, at 10% above the book value in settlement of his claim and the remaining half was sold in the market at a loss of 30%.
- Loan of ₹ 50,000 advanced by Nisha to the firm was returned.
- Loss on realisation ₹ 30,000 was distributed among the partners equally.
Journalise the above transaction at the time of dissolution of the firm.
Solution :
