Pass the journal entries for the following transactions on the dissolution of the firm of P and Q after various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Stock Rs. 2,00,000. P took over 50% of stock at a discount of 10%. Remaining stock was sold at a profit of 25% on cost.
(b) Debtors Rs. 2,25,000. Provision for Doubtful Debts Rs. 25,000; Rs. 20,000 of the book debts proved bad.
(c) Land and Building (Book value Rs. 12,50,000) sold for Rs. 15,00,000 through a broker who changed 2% commission.
(d) Machinery (Book value Rs. 6,00,000) was handed over to a creditor at a discount of 10%.
(e) Investment (Book value Rs. 60,000) realised at 125%.
(f) Goodwill of Rs. 75,000 and prepaid fire insurance of Rs. 10,000.
(g) There was an old furniture in the firm which had been written off completely in the books. This was sold for Rs. 10,000.
(h) Z an old customer whose account for Rs. 20,000 was written off as bad in the previous year paid 60%.
(i) P undertook to pay Mrs. P’s loan of Rs. 50,000.
(j) Trade creditors Rs. 1,60,000. Half of the trade creditors accepted Plant and Machinery at an agreed valuation of Rs. 54,000 and cash in full settlement of their claims after allowing a discount of Rs. 16,000. Remaining trade creditors were paid 90% in final settlement.
