S & Y are partners with profit sharing ratio as 2:1. The position of the firm 31st December 2004 when they decided to dissolve the business was as follows: <table><thead><tr class="firstRow"><th style="text-align: left;">Liabilities</th><th style="text-align: left;">Rs.</th><th style="text-align: left;">Assets</th><th style="text-align: left;">Rs.</th><th style="text-align: left;"> </th></tr></thead><tbody><tr><td>Sundry Creditor</td><td>1,50,000</td><td>Plant & Machinery</td><td>2,50,000</td><td> </td></tr><tr><td>General Reserve</td><td>1,00,000</td><td>Furniture</td><td>40,000</td><td> </td></tr><tr><td>Capital Accounts:</td><td> </td><td style="word-break: break-all;">Stock</td><td style="word-break: break-all;">1,00,000</td><td style="word-break: break-all;"> </td></tr><tr><td>S quad2,20,000</td><td> </td><td>Debtors</td><td>2,00,000</td><td> </td></tr><tr><td>Y quad2,20,000</td><td>4,40,000</td><td>Cash at bank</td><td>1,00,000</td><td> </td></tr><tr><td>Total</td><td>6,90,000</td><td>Total</td><td>6,90,000</td><td> </td></tr></tbody></table> The details or realization was as follows: 1. S took over plant & machinery and furniture at book value less 10% 2. Y took over the stock at Rs. 1,75,000 3. Debtors realized Rs. 1,85,000 4. Sundry creditors were settled at a discount of 5% Required: Prepare necessary journal entries and ledger accounts to close the books of the firm.

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S & Y are partners with profit sharing ratio as 2:1

S & Y are partners with profit sharing ratio as 2:1. The position of the firm 31^st December 2004 when they decided to dissolve the business was as follows:

Liabilities	Rs.	Assets	Rs.
Sundry Creditor	1,50,000	Plant & Machinery	2,50,000
General Reserve	1,00,000	Furniture	40,000
Capital Accounts:		Stock	1,00,000
S quad2,20,000		Debtors	2,00,000
Y quad2,20,000	4,40,000	Cash at bank	1,00,000
Total	6,90,000	Total	6,90,000

The details or realization was as follows:
1. S took over plant & machinery and furniture at book value less 10%
2. Y took over the stock at Rs. 1,75,000
3. Debtors realized Rs. 1,85,000
4. Sundry creditors were settled at a discount of 5%

Required: Prepare necessary journal entries and ledger accounts to close the books of the firm.

Expert Solution

Amanda K answered 2 years ago

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