please help me with the different cases of realisation expenses...grrhh m confused...

there are three cases of realisation expenses

(i) paid by the firm

realisation a/c   dr

 to cash

(ii) paid by the partner on behalf of the firm

realisation a/c  dr

to partners capital a/c

(iii) paid by partner personally

- - - no entry - - -

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 shuchita pls do ask more questions :))))))

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ohk kavya...now for example the firm gives 6000 for the realisation expenses to one of the partners (say A) but the expenses actually incurred Rs.6400

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what will be the journal entry in this case?

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 since the expense is taken up by the partner only the amount paid to a will be taken into consideration

ie 6000

journal

DATE

PARTICULARS

LF

DEBIT

CREDIT

 

Realisation a/c  Dr

  To a’s capital  

(being realisation expense taken up by a)

 

6000

 

6000

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 oof that credit 6000 should come down 

i think meritnation has set default to avoid unwanted spaaces

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thnx..

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For payment of realisation expenses
(a) When some expenses are incurred and paid by the firm in the process of
realisation of assets and payment of liabilities:
Realisation A/c Dr.
To Bank A/c
(b) When realisation expenses are paid by a partner on behalf of the firm:
Realisation A/c Dr.
To Partner’s Capital A/c
(c) When a partner has agreed to undertake the dissolution work for an
agreed remuneration bear the realisation expenses:
(i) if payment of realisation expenses is made by the firm
Partner’s Capital A/c Dr.
To Bank A/c
(ii) if the partner himself pays the realisation expenses, no entry is required
(iii) For agreed remuneration to such partner
Realisation A/c Dr.
To Partner’s Capital A/c
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