Question

Ramesh, Naresh and Mahesh are partner sharing profits in 3:2:1 ratio. They decided the dissolution of partnership on 31 Dec. 2014. On this data balance sheet as under.

Following transactions are made on dissolution :

1. Joint life insurance policy surrendered on Rs 15,000.
2. Ramesh takes investment on Rs 17,500 and agreed to pay his wife’s loan.
3. Naresh takes stock on Rs 7,500 and debtors Rs 4000 of Rs 5000.
4. Realisation from machine 50,000 and from debtors 50% of their book value.
5. Realisation expenses was Rs 1000.
6. Rs 3000 realized from investment which was not shown in the books.

Make journal entries to close the books and prepare necessary accounts.

Answer 1

Journal Entries