What is the treatment of provisions against assets on dissolution of a firm? Post category:Accountancy Reading time:1 mins read SOLUTION Provisions against assets are credited to Realisation A/c. Please Share This Share this content Opens in a new window X Opens in a new window Facebook Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostAt which value the assets against which provisions exist are transferred to Realisation Account? Next PostWhat entry is passed when an asset is given to a Creditor in full settlement of his dues? You Might Also Like What is meant by Cash equivalents? (C.B.S.E. 201.6, 2017, 2019, 2020) October 4, 2022 Aman commenced business with a capital of Rs. 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made: 31st March, 2014−Loss Rs. 5,000 31st March, 2015−Profit Rs. 13,000 31st March, 2016−Profit Rs. 17,000 31st March, 2017−Profit Rs. 20,000 31st March, 2018−Profit Rs. 25,000 During this period he had drawn Rs. 40,000 for his personal use. On 1st April, 2018, he admitted Boman into partnership on the following terms: Boman to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount Boman should invest to become a partner and pass entries to record the transactions relating to admission. August 1, 2022 Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third-party liability have been transferred to Realisation Account: (a) Kunal agreed to pay off his wife’s loan of Rs. 6,000. (b) Total Creditors of the firm were Rs. 40,000. Creditors worth Rs. 10,000 were given a piece of furniture costing Rs. 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10% (c) Rohit had given a loan of Rs. 70,000 to the firm which was duly paid. (d) A machine which was not recorded in the books was taken over by Kunal at Rs. 3,000, whereas its expected value was Rs. 5,000. (e) The firm had a debit balance of Rs. 15,000 in the Profit and Loss Account on the date of dissolution. (f) Sarthak paid the realisation expenses of Rs. 16,000 out of his private funds, who was to get a remuneration of Rs. 15,000 for completing dissolution process and was responsible to bear all the realisation expenses. July 25, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
Aman commenced business with a capital of Rs. 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made: 31st March, 2014−Loss Rs. 5,000 31st March, 2015−Profit Rs. 13,000 31st March, 2016−Profit Rs. 17,000 31st March, 2017−Profit Rs. 20,000 31st March, 2018−Profit Rs. 25,000 During this period he had drawn Rs. 40,000 for his personal use. On 1st April, 2018, he admitted Boman into partnership on the following terms: Boman to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount Boman should invest to become a partner and pass entries to record the transactions relating to admission. August 1, 2022
Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third-party liability have been transferred to Realisation Account: (a) Kunal agreed to pay off his wife’s loan of Rs. 6,000. (b) Total Creditors of the firm were Rs. 40,000. Creditors worth Rs. 10,000 were given a piece of furniture costing Rs. 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10% (c) Rohit had given a loan of Rs. 70,000 to the firm which was duly paid. (d) A machine which was not recorded in the books was taken over by Kunal at Rs. 3,000, whereas its expected value was Rs. 5,000. (e) The firm had a debit balance of Rs. 15,000 in the Profit and Loss Account on the date of dissolution. (f) Sarthak paid the realisation expenses of Rs. 16,000 out of his private funds, who was to get a remuneration of Rs. 15,000 for completing dissolution process and was responsible to bear all the realisation expenses. July 25, 2022