A and B are in partnership in computer components manufacturers. The balance sheet of A and B as on 31 December 2010 was as follows:
|
Liabilities |
Assets |
||
|
Creditors |
2,62,100 |
Cash at Bank |
82,500 |
|
Capital Accounts: |
Debtors |
5,28,600 |
|
|
A:7,95,100 |
Stock |
4,40,900 |
|
|
B:7 95 100 |
15,90,200 |
Plant |
5,00,300 |
|
Land & Buildings |
3,00,000 |
||
|
18,52,300 |
18,52,300 |
They decided to sell their business as from the above date to Chips Ltd. The Company acquires the stock, plant, Land & Buildings and goodwill for which the vendors receive Rs.15,00,000 in fully paid up equity shares of Rs.100 each. The Company agrees to pay creditors and collect the book debts on behalf o the vendors for a commission of 3% on cash collected and 2% on amounts paid. By March 2011, the creditors have all been paid and the amount so paid is Rs.2,76,300. Also, the book debts have all been collected or accounted for and have realized Rs.5,21,300. Accordingly on 31 March, the vendors were paid the balance which the company holds to credit. Pass the journal entries in the books of the company and show the vendor’s suspense account.