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8.18 Double Entry Book Keeping—CBSE XII

Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 76,000 By Realisation A/c—Liability for Damages 20,000
To Realisation A/c—Sales of Assets 29,30,000 By Realisation A/c—Mrs. Kush’s Loan A/c 1,00,000
By Realisation A/c—Liabilities 4,46,000
By Luv’s Capital A/c (Final Payment) 12,99,500
By Kush’s Capital A/c (Final Payment) 11,40,500
30,06,000 30,06,000
Illustration 17.
Following is the Balance Sheet of A and B as at 31st March, 2018:
Liabilities ` Assets `
Capital A/cs: Goodwill 40,000
A‘s 80,000 Building 1,00,000
B’s 80,000 1,60,000 Plant and Machinery 80,000
General Reserve 6,000 Furniture and Fittings 20,000
Profit and Loss 2,000 Investments 61,200
A’s Loan 40,000 Stock 34,800
Mrs. A‘s Loan 80,000 Debtors 68,000
Creditors 1,00,000 Less: Provision for Doubtful Debts 8,000 60,000
Bills Payable 60,000 Bills Receivable 40,000
Investment Fluctuation Reserve 11,200 Cash at Bank 52,000
Employees’ Provident Fund 44,800 Advertisement Suspense 16,000
5,04,000 5,04,000

Note: There was a bill for ` 4,000 under discount. The bill was received from Z.
The firm was dissolved on 31st March, 2018 and the following transactions took place:
(i) A agreed to pay his wife’s loan.
(ii) Debtors realised ` 48,000.
(iii) B took all the investments at ` 48,000.
(iv) Other assets realised as follows: Plant and Machinery ` 65,000, Furniture and Fittings
` 20,000, Building ` 2,00,000, Goodwill ` 24,000.
(v) A accepted stock at ` 32,000 and B took over Bills Receivable at 20% discount.
(vi) Z proved insolvent and first and final dividend of 25% was received from his estate.
(vii) An outstanding bill of ` 2,000 for repairs was paid off. Creditors were settled at 5% discount.
(viii) Realisation Expenses amounted to ` 8,000.
Pass Journal entries and also prepare necessary ledger accounts.
Solution: In the Book of M/s A and B
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2018 Realisation A/c ...Dr. 4,44,000
March 31 To Goodwill A/c 40,000
To Building A/c 1,00,000
To Plant and Machinery A/c 80,000
To Furniture and Fittings A/c 20,000
To Investments A/c 61,200
To Stock A/c 34,800
To Debtors A/c 68,000
To Bills Receivable A/c 40,000
(Transfer of assets to Realisation Account)