Question 5:
Pass Journal
entries for the following:
(a) Realisation expenses amounted to `
10,000 were paid by the firm on behalf of Alok, a partner, with whom it was
agreed at ` 7,500.
(b) Realisation expenses amounted to `
5,000. It was agreed that the firm will pay `
2,000 and balance by Ravinder, a partner.
(c) Dissolution expenses amounted to
` 10,000
were paid by Amit, a partner, on behalf of the firm.
Answer:
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Journal |
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S.N. |
Particulars |
L.F. |
Debits ` |
Credit ` |
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(a) |
Realisation A/c |
Dr. |
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7,500 |
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To Alok’s Capital A/c |
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7,500 |
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(Remuneration allowed to Alok) |
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Alok’s capital A/c |
Dr. |
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10,000 |
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To Bank A/c |
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10,000 |
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(Expenses paid by the firm on behalf of Alok) |
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Alternatively, only one single entry can
also be passed instead of above two entries. |
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Realisation A/c |
Dr. |
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7,500 |
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Alok’s Capital A/c |
Dr. |
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2,500 |
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To Bank A/c |
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10,000 |
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(Realisation expenses paid) |
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(b) |
Realisation A/c |
Dr. |
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5,000 |
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To Ravinder’s Capital A/c |
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3,000 |
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To Bank A/c |
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2,000 |
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(Realisation expenses paid) |
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(c) |
Realisation A/c |
Dr. |
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10,000 |
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To Amit’s Capital A/c |
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10,000 |
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(Realisation expenses paid by Amit on behalf of the firm) |
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Question 6:
Pass necessary Journal entries in the
following cases:
(a) Creditors worth `
85,000 accepted ` 40,000 as cash and
Investment worth ` 43,000, in full
settlement of their claim.
(b) Creditors were ` 16,000. They
accepted Machinery valued at ` 18,000 in settlement
of their claim.
(c) Creditors were ` 90,000. They
accepted Building valued at ` 1,20,000 and paid
cash to the firm ` 30,000.
Answer:
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Journal |
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Particulars |
L.F. |
(
`) |
(
`) |
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(a) |
Realisation A/c |
Dr. |
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40,000 |
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To Cash A/c |
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40,000 |
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(Creditors worth ` 85,000 accepted 40,000 as cash and investment worth ` 43,000 in full settlement) |
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(b) |
No Entry |
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(Creditors worth ` 16,000 accepted Machinery worth ` 18,000 in full settlement. No entry as both asset and
liability are already transferred to the Realisation Account) |
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(c) |
Cash A/c |
Dr. |
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30,000 |
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To Realisation A/c |
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30,000 |
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(Creditors worth ` 90,000 accepted Building worth ` 1,20,000 and paid back `
30,000 as cash after settlement of claim to the firm) |
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Question 7: Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into partnership firm last year only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial requirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due to certain disagreements and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had transferred various assets and external liabilities to Realisation Account. Due to her busy schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On the date of dissolution, you have observed the following transactions:
(i) Dhwani's Loan of `50,000 to the firm was settled by paying `42,000.
(ii) Paavni's Loan of `40,000 was settled by giving an unrecorded asset of ` 45,000.
(iii) Loan to Charu of `60,000 was settled by payment to Charu's brother loan of the same amount.
(iv) lknoor's Loan of ` 80,000 to the firm and she took over Machinery of ` 60,000 as part payment.
You are required to pass necessary entries for all the above mentioned transactions.
(CBSE Sampe Paper 2023)
Answer:
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Date |
Particulars |
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Dr. (`) |
Cr. (`) |
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Dhwani's Loan A/c |
Dr. |
50,000 |
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To Realisation A/c |
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8,000 |
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To Bank A/c |
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42,000 |
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(Being Dhwani’s loan settled by paying `42,000) |
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Paavni's Loan A/c |
Dr. |
40,000 |
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To Realisation A/c |
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40,000 |
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(Being Loan of `40,000 was settled by giving an unrecorded asset of ` 45,000) |
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Realisation A/c |
Dr. |
60,000 |
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To Loan to Charu |
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60,000 |
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(Being Loan to Charu settled by payment to Charu's brother loan) |
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lknoor's Loan A/c |
Dr. |
80,000 |
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To Realisation A/c |
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60,000 |
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To Bank A/c |
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20,000 |
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(Being Loan to the firm and she took over Machinery) |
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Question 8:
Pass Journal entries for the following at the time of dissolution of a firm:
(a) Sale of
Assets − `50,000.
(b) Payment of Liabilities − `10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to `15,000.
The firm had agreed with Amrit, a partner, to reimburse him up to `
10,000.
(e) Employees
provident fund `10,000,
(f) Z, an old customer, whose account for `6,000 was written off as bad in the
previous year, paid 60% of the amount written off.
(g) Investment (Book Value `10,000)
realised at 150%.
(h) Realisation
expenses were `10,000. The firm had agreed with krishan
a partner, to reimburse him up to ` 7,500.
Answer:
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Journal |
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S.N. |
Particulars |
L.F. |
Debits ` |
Credit ` |
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(a) |
Cash A/c |
Dr. |
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50,000 |
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To Realisation A/c |
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50,000 |
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(Assets realized for cash) |
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(b) |
Realisation A/c |
Dr. |
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10,000 |
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To Cash A/c |
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10,000 |
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(Payment of liabilities made) |
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(c) |
Realisation A/c |
Dr. |
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2,500 |
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To X’s Capital A/c |
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2,500 |
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(5% commission allowed to Mr. X’s on sale of assets of ` 50,000) |
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(d)() (e) |
Realisation A/c |
Dr. |
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10,000 |
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To Amrit’s Capital A/c |
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10,000 |
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(Amrit was allowed remuneration on account of realisation) |
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Amrit’s Capital A/c |
Dr. |
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15,000 |
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To Cash A/c |
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15,000 |
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(Realisation expenses paid on behalf of amrit) |
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Alternatively, only one single entry can
also be passed instead of above two entries. |
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Realisation A/c |
Dr. |
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10,000 |
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Amrit’s Capital A/c |
Dr. |
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5,000 |
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To Cash A/c |
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15,000 |
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(Realisation expenses paid) |
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Realization A/c Dr. |
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To Cash A/c |
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(Paid provident fund) |
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(f) |
Cash A/c |
Dr. |
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3,600 |
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To Realisation A/c |
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3,600 |
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(60% of the Bad debts against Z an old customer now recovered) |
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(g) |
Cash A/c |
Dr. |
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15,000 |
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To Realisation A/c |
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15,000 |
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(Investments are realised at 150%) |
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(h) |
Realisation A/c |
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7,500 |
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To Krishna’s Capital A/c |
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7,500 |
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(Krishna, a partner, reimbursed for realization expenses) |
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Ts Grewal Solution 2023-2024
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Class 12 / Volume – I