Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third-party liability have been transferred to Realisation Account:
- kanal agreed to pay his wife’s loan of ₹ 60,000.
- Total Creditors of the firm were ₹ 40,000. Creditors of ₹ 10,000 were given a piece of furniture of book value ₹ 8,000 out of total furniture of book value ₹ 28,000 in settlement. Remaining Creditors allowed a discount of 1%.
- Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
- A machine which was not recorded in the books was taken by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
- The firm had a debit balance of ₹ 15,000 in the Profit & Loss Account on the date of dissolution.
- Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation
Solution :
