Give Journal Entries for the Following Transactions-Accountancy Solution,Explain

Q.5. Give journal entries for the following transactions:

1. To record the Realisation of various assets and liabilities,
2. A Firm has a Stock of Rs 1,60,000. Aziz, a partner took over 50% of the Stock at a discount of 20%,
3. Remaining Stock was sold at a profit of 30% on cost,
4. Land and Buildging (book value Rs 1,60,000) sold for Rs 3,00,000 through a broker who charged 2%, commission on the deal,
5. Plant and Machinery (book value Rs 60,000) was handed over to a Creditor at an agreed valuation of 10% less than the book value,
6. Investment whose face value was Rs 4,000 was realised at 50%.

SOLUTION 

 

S.No	Particulars		L.F.	Amount (Rs.)	Amount (Rs.)
1.1	For Transfer of Assets :
	Realisation A/c	Dr.		–
	To Assets A/c (Individually)				–
	(Assets transferred to Realisation Account)
1.2	For Transfer of Liabilities :
	Liabilities A/c (Individually)	Dr.		–
	To Realisation A/c				–
	(Liabilities transferred to Realisation Account)
1.3	For sale of Asset
	Cash/Bank A/c	Dr.		–
	To Realisation A/c				–
	(Assets sold)
1.4	For amiability paid
	Realisation A/c	Dr.		–
	To Cash/Bank A/c				–
	(Liabilities paid)
2)	Aziz’s Capital A/c	Dr.		64,000
	To Realisation A/c				64,000
	(Aziz, a partner took over 50% of stock at 20% discount, the value of the total stock  was Rs 1,60,000)
3)	Bank A/c	Dr.		1,04,000
	To Realisation A/c				1,04,000
	(Stock worth Rs 80,000  sold at a profit of 30% on cost)
4)	Bank A/c	Dr.		2,94,000
	To Realisation A/c				2,94,000
	(Land and Building sold for Rs 3,00,000 and 2% commission paid to the broker)
5)	No entry			–	–
	(Plant and Machinery Rs 60,000 handed over to the creditors at a discount of 10%)
6)	Bank A/c	Dr.		2,000
	To Realisation A/c				2,000
	(Investments worth Rs 4,000 were realised at 50%)

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