What Journal Entries Will Be Recorded For the Following Transactions On the Dissolution Of A FFirm ? Solution,explain

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Q.4. What journal entries will be recorded for the following transactions on the dissolution of a firm:

[a] Payment of unrecorded liabilities of Rs 3,200.
[b] Stock worth Rs 7,500 is taken by a partner Rohit.
[c] Profit on Realisation amounting to Rs 18,000 is to be distributed between the partners Ashish and Tarun in the ratio of 5:7.
[d] An unrecorded asset realised Rs 5,500.

SOLUTION

Journal Entries

DateParticularsL.F.
Amount
(Dr.)
Amount
(Cr.)
(A)Realisation A/cDr.3,200
   To Bank A/c3,200
(Being Unrecorded liability paid)
(B)Rohit’s Capital A/cDr.7,500
   To Realisation A/c7,500
(Being firm’s stock is taken by rohit)
(C)Realisation A/cDr.18,000
   To Ashish Capital A/c7,500
   To Tarun Capital A/c10,500
(Profit on Realisation A/c is transferred to Partners’ Capital Account)
(D)Bank A/cDr.5,500
   To realisation A/c5,500
(Being Unrecorded asset sold)

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