Orion, Leanna and Aric were partners sharing profits and losses in the proportion of 2:2:1, following is their Balance Sheet as on 31st March, 2008. Balance Sheet as on 31 March, 2008 Assets Liabilities Capital Accounts: Orion Leanna Aric General Reserve Creditors Orion's Loan A/c Bills payable Amount $ Machinery 30,000 Stock 10,000 Debtors 10,000 Loss: R.D.D. 3,000 Investment 20,000 Profit and Loss A/c 4,000 Bank 7,000 84,000 27,500 1,500 2) Dissolution expenses were $1,500. 3) Goodwill of the firm realised $ 12,000 Pass the necessary Journal entries in the books of the firm. Amount $ 25,000 10,000 26,000 12,000 9,000 2,000 84,000 On the above date the partners decided to dissolve the firm: 1) Assets were realised: Machinery $ 22,500, Stock $ 9,000, Investment $ 10,500, Debtors $ 22,500.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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