Sarthak paid the realisation expenses of Rs.16000 out of his private funds, who was to get a remuneration of Rs.15000 for completing dissolution process and was responsible to bear all the realisation expenses. 

 

The journal entry given for this question in Dr.Realisation A/c and Cr. Sarthak's capital A/c by Rs.15000

 

 

Can you please explain clearly as to why we are considering 15000 and not 16000?

Solution :-

As, the Firm is giving him remuneration of Rs. 15,000 for completing the dissolution process and was responsible to bear all the realisation expenses.
​​​​​​ So, In Journal of the Firm we record the amount of remuneration which is paid by firm. That's why in Journal entry Realisation account is debited and Sarthak's capital account is credited by Rs.15000.

  • 1
What are you looking for?