Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2019, their Balance Sheet was as follows:
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Capital A/cs:
|
|
|
Land and Building
|
4,00,000
|
|
Achal
|
3,00,000
|
|
Machinery
|
3,00,000
|
|
Vichal
|
5,00,000
|
8,00,000
|
Debtors
|
2,22,000
|
|
Creditors
|
1,79,000
|
Cash at Bank
|
78,000
|
|
Employees' Provident Fund
|
21,000
|
|
|
|
|
10,00,000
|
|
10,00,000
|
|
|
|
|
|
The firm was dissolved on 1st April, 2019 and the Assets and Liabilities were settled as follows:
a Land and Building realised 4,30,000.
b Debtors realised 2,25,000 withinterest and 1,000 were recovered for Bad Debts written off last year.
c There was an Unrecorded Investment which was sold for 25,000.
d Vichal took over Machinery at 2,80,000 for cash.
e 50% of the Creditors were paid 4,000 less in full settlement and the remaining Creditors were paid full amount. Pass necessary Journal entries for dissolution of the firm.