ACCOUNTS TERM 2

ONE SHOT REVISION

Basics
These Liabilities Must Be paid with their Book value if Question is
silent about their Payment
A) Creditors/ sundry creditors
B) Bills Payable
C) Employees provident Fund
D)Bank Overdraft
E) Advance income
F) Outstanding expenses
G) Bank loan/ wife loan

Investment Fluctuation Fund, Provision for Bad and doubtful debts &
provision for depreciation are only Transfer credit of Realisation Account.
Q.1) A, B and C were partners sharing profits in the ratio of
2 : 2 : 1. They decided to dissolve their firm on 31st March, 2018 when the
Balance Sheet was:
Following transactions took place:
(a) A took over Stock at ` 36,000. He also took over his wife’s loan.
(b) B took over half of Debtors at ` 28,000.
(c) C took over Investments at ` 54,000 and half of Creditors at their
book value.
(d) Remaining Debtors Realised 60% of their book value. Furniture sold
for ` 30,000; Machinery ` 82,000 and Land ` 1,20,000.
(e) An unrecorded asset was sold for ` 22,000.
(f) Realisation expenses amounted to ` 4,000.
Prepare Realisation Account
Journal Entries RULES
Q.2) Pass the necessary Journal Entries:
In Balance sheet the Following Balances are Appear
Stock 80,000; X’s Loan (cr.) 1,00,000; Building 6,00,000 & Creditors 1,60,000.

(i) X took over 60% of the stock at a discount of 20%.

(ii) Remaining stock was sold at a profit of 20% on cost.
(iii) X accepted an unrecorded asset of ₹80,000 at ₹75,000 and the
balance through cheque, against the payment of his loan to the firm.
(iv) Land and Building sold for ` 5,00,000 through broker who charged
2% commission.
(v) Half the trade creditors accepted plant and machinery at an agreed
valuation of ` 54,000 and cash of ₹ 10,000 in full settlement of their
claims. Remaining Creditors are Paid 10% Less.
(vi) Realisation expenses amounted to ` 7,000. It was agreed that the
firm will pay 3,000 and balance by Y, a partner.
(vii) Y took over Unrecorded assets of ₹5000 for ₹3000 for Cash.
Q.3) What Journal entries will be passed in the books of A and B sharing
profits and losses in the ratio of 3 : 1, for the following transactions on
dissolution of the firm?
(i) An unrecorded asset Realised ` 25,000.
(ii) Stock of ` 20,000 was taken by partner A.
(iii) Creditors were paid ` 30,000.
(iv) There was a balance of ` 10,000 in the General Reserve Account on the
date of dissolution.
(v) There was a vehicle loan of ₹ 2,00,000 which was paid by surrender
of asset to the bank at an agreed value of ₹ 1,40,000 and the shortfall
was met from firm’s bank account.

(vi) Dissolution expenses amounted to ` 10,000 were paid by A a

partner, on behalf of the firm
(vii) Gain (Profit) on Realisation of ` 40,000 is to be distributed between
partners A and B.
Partners Self loan Journal entry & Treatment
 THANK YOU

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