Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2019, their Balance Sheet was as follows:

LiabilitiesAmount ( Rs.)AssetsAmount ( Rs.)
Capital A/c : Land and Building4,00,000
Achal  3,00,000 Machinery3,00,000
Vichal 5,00,0008,00,000Debtor Rs.2,22,000
Creditors1,79,000Cash at Bank 78,000
Employees’ Provident Fund21,000  
 10,00,000 10,00,000

The firm was dissolved on 1st April, 2019 and the Assets and Liabilities were settled as follows:
(a) Land and Building realised  Rs. 4,30,000.
(b) Debtor realised  Rs. 2,25,000 (with interest) and Rs. 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for Rs. 25,000.
(d) Vichal took over Machinery at Rs. 2,80,000 for cash.
(e) 50% of the Creditors  were paid Rs. 4,000 less in full settlement and the remaining Creditors  were paid full amount.
Pass necessary Journal entries for dissolution of the firm.


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