Question

A and B were partners in a firm sharing profits and losses equally. Their firm was dissolved on 15^th March, 2004, which resulted in a loss of Rs.30,000. On that date the capital A/C of A showed a credit balance of Rs.20,000 and that of B a credit balance of Rs.30000. The cash account has a balance of Rs.20000. You are required to pass the necessary journal entries for the 

(i) Transfer of loss to the capital accounts and 

(ii) making final payment to the partners.

Answer 1

 (i)

A’s capital A/C Dr.	15000
B’s capital A/C Dr.	15000
To realization A/C		30000
(For transfer of loss on dissolution)

(ii)

A’s capital A/C Dr.	5000
B’s capital A/C Dr.	15000
To cash A/C		20000
(For final payment to partners)