Question

A and B were partners in a firm sharing profits and losses equally. Their firm was dissolved on 15th 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’ capital A/C Dr. | 15000 | |
| B’ capital A/C Dr. | 15000 | |
| To realization A/C | | 30000 |
| (For transfer of loss on dissolution) | | |

(ii)

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